United States v. Jacor Communications, Inc. et al.; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Jacor Communications, Inc. et al.; Proposed

Final Judgment and Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. Section 16 (b) through (h), that a proposed

Final Judgment, Stipulation and Competitive Impact Statement have been

filed with United States District Court for the Southern District of

Ohio in United States of America v. Jacor Communications, Inc. et al.,

Civil Action C-1-96-757. The Complaint in this case alleged that the

proposed acquisition of Citicasters, Inc. by Jacor Communications, Inc.

would tend to lessen competition substantially in the sale of radio

advertising in Cincinnati, Ohio and the surrounding areas in violation

of Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The proposed Final

Judgment requires Jacor to divest within six months of the filing of

the Final Judgment one of Cincinnati radio stations, WKRQ-FM, it will

acquire from Citicasters. The proposed Final Judgment further requires

defendants to ensure that, until the divestiture mandated by the decree

has been accomplished, WKRQ will be operated as a viable, ongoing

business and kept separate and apart from Jacor's other Cincinnati

radio stations. Finally the proposed Final Judgment requires Jacor to

give the United States prior notice as to certain future radio station

acquisitions in Cincinnati or agreements that would grant Jacor the

right to sell advertising time for Cincinnati stations that are not

owned by Jacor.

Public comment is invited within the statutory 60-day comment

period. Such comments, and responses thereto, will be published in the

Federal Register and filed with the Court. Comments should be directed

to Donald J. Russell, Chief, Telecommunications Task Force, Antitrust

Division, Department of Justice, 555 4th Street, NW., Room 8104,

Washington, DC 2001.

Constance K. Robinson,

Director of Operations.

In the United States District Court for the Southern District of Ohio

United States of America, Plaintiff, v. Jacor Communications,

Inc. and Citicasters, Inc., Defendants.

No. C-1-96-757 (Antitrust)

Stipulation

Judge Weber

Filed: 8/5/96

[[Page 42653]]

It is stipulated by and between the undersigned parties, by their

respective attorneys, that:

A. The parties to this Stipulation consent that a Final Judgment in

the form attached may be filed and entered by the Court, upon any

party's or the Court's own motion, at any time after compliance with

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. Sec. 16), 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 entry of the proposed Final Judgment

by serving notice on the defendants and by filing that notice with the

Court.

B. If Jacor enters into a local marketing agreement or time

brokerage agreement (``LMA'') for WKRQ with another person that has

entered into a written agreement to acquire the WKRQ Assets

(``broker'') and the person and LMA have been approved by the

Plaintiff, Jacor need not comply with Sections VIII (A), (C), (D), (F),

(G), (H), (K), (M), or (N) of the Final Judgment, provided that the LMA

includes the following provisions:

(1) Jacor shall not sell advertising time for WKRQ or any other

station owned by the broker;

(2) If Jacor has any employee working at WKRQ, each such employee

shall not sell advertising time, or participate in programming or

financial decisions of the broker, and Jacor shall ensure that each

such employee does not influence or attempt to influence, directly or

indirectly, any decision related to programming or the sale of

advertising time by the broker, except to the extent necessary for

Jacor to fulfill its obligations as the licensee under applicable FCC

rules and policies related to LMAs;

(3) Each such employee shall not have access to WKRQ confidential

information, including marketing sales, pacing or rate information

related to the sale of advertising time on radio stations in the

Cincinnati area, and shall not communicate or otherwise disclose any

information related to the sale of advertising on WKRQ or the format or

programming at WKRQ to anyone at Jacor;

(4) Each such employee shall not be employed by another Jacor

Cincinnati Radio Station except that Jacor employees may provide

technical and administrative services to WKRQ;

(5) No officer, director or employee of Jacor shall be an officer,

director or employee of the broker;

(6) The broker shall hold no interest in Jacor at the time it

enters into the LMA, unless plaintiff agrees otherwise in writing;

(7) Jacor shall not hold an interest in the broker, and shall not

receive compensation related to profits earned by the broker from

advertising sales of WKRQ;

(8) Jacor shall exercise no right of control under the LMA to

oversee the programming, personnel, operations or finances of WKRQ,

without providing 14 days prior notice to plaintiff, except that if

Jacor is required to take action to fulfill its obligations as the

licensee under applicable FCC rules and policies related to LMAs, Jacor

may take immediate action after notifying plaintiff. Such action shall

be limited in scope and time to what is necessary to correct the

problem and shall be consistent with FCC rules and policies;

(9) Jacor shall take all steps necessary to preserve the WKRQ

Assets in good working condition within the bounds of its rights and

obligations under the LMA; and

(10) Jacor and the broker shall enter into no agreement or

understanding that limits competition between WKRQ and the Jacor

Cincinnati radio stations.

For purposes of this Stipulation, the term ``broker'' means the

person who enters into the LMA and the written agreement to acquire the

WKRQ Assets, the person's successors and assigns and its subsidiaries,

affiliates, parents, directors, officers, managers, agents and

employees acting for or on behalf of any of them. This provision will

survive the entry of the Final Judgment and terminate after the

divestiture ordered by Section IV of the Final Judgment is completed.

C. 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 diligent and good faith efforts of Jacor and any

prospective owner of the WKRQ Assets. The Department will, in the

exercise of its sole discretion, acting in good faith, give special

consideration to extending the time period specified in Section IV of

the Final Judgment provided that:

(1) Jacor has entered into a definitive agreement to divest the

WKRQ Assets and such agreement and the prospective purchaser have been

approved by the Department;

(2) 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 filed with the

appropriate agency;

(3) Receipt of such approvals are the only closing conditions that

have not been satisfied or waived; and

(4) Jacor has demonstrated that neither it nor the prospective

owner of the WKRQ Assets is responsible for any such delay.

D. The parties understand that nothing in the Final Judgment should

be construed to require the trustee appointed pursuant to Section V of

the Judgment to directly or indirectly control, supervise, direct or

attempt to control the operations of WKRQ, without receiving the prior

approval of the FCC. Such operations, including complete control and

supervision of all of the programs, employees, finances, operations and

policies of WKRQ, shall remain solely the responsibility of defendants,

subject to its obligations set forth in Section VIII of the Final

Judgment, or the responsibility of the broker, subject to the rights

and limitations described in Paragraph (C), above. Nothing in this

paragraph shall change or limit the right of the trustee to sell the

WKRQ Assets pursuant to Section V of the Final Judgment.

E. The parties shall abide by and comply with the provisions of the

proposed Final Judgment pending entry of the Final Judgment, and shall,

from the date of the filing of this Stipulation, 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; provided,

however, the Citicasters need not comply with Section V or Sections

VIII(B) through VIII(N) until the Jacor/Citicasters Transaction has

been consummated; provided further that, prior to the consummation of

the Transaction, Jacor shall take no action to impede or influence

Citicasters' compliance with Section VIII(A); and provided, further,

that Citicasters need not comply with Sections IV(B) through IV(D)

until the earlier to occur of the consummation of the Transaction or

ten business days following issuance of all FCC approvals required as a

condition to the consummation of the Transaction, except that, prior to

the time Citicasters' obligation to comply with Sections IV(B) through

IV(D) arises, Citicasters shall use all reasonable efforts to cooperate

with Jacor's efforts to divest the WKRQ Assets.

F. Jacor shall prepare and deliver reports in the form required by

the provisions of paragraph B of Section VII of the proposed Final

Judgment commencing no later than September 1,1996, and every thirty

days thereafter pending entry of the Final Judgment.

[[Page 42654]]

G. In the event plaintiff withdraws its consent, as provided in

paragraph (A) above, or if the proposed final Judgment is not entered

pursuant to this Stipulation, this Stipulation shall be of no effect

whatever, and the making of this Stipulation shall be without prejudice

to any party in this or any other proceeding.

H. All parties agree that this agreement can be signed in multiple

counter-parts.

Dated: August 2, 1996.

For the Plaintiff:

Nancy M. Goodman,

Assistant Chief, Telecommunications Task Force.

Andrew S. Cowan,

Attorney, Telecommunications Task Force, U.S. Department of Justice,

Antitrust Division, 555 4th Street N.W., Room 8104, Washington, DC

20001, (202) 514-5621.

For the Defendant:

Thomas B. Leary,

Counsel for Jacor Communications, Inc.

Tom D. Smith,

Counsel for Citicasters, Inc.

Whereas, plaintiff, the United States of America, having filed its

Complaint herein on August 5, 1996, and plaintiff and defendants, by

their respective attorneys, having consented to the entry of its 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 essence of this Final Judgment is prompt and

certain divestiture of certain assets to assure that competition is not

substantially lessened;

And whereas, plaintiff requires Jacor 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 be made and that Jacor will later raise

no claims of hardship or difficulty as grounds for asking the Court to

modify any of the divestiture provisions contained below;

And, 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 the

subject matter of this action. The Complaint states a claim upon which

relief may be granted against the defendants under Section 7 of the

Clayton Act, as amended (15 U.S.C. Sec. 18).

II. Definitions

As used in this Final Judgment:

A. ``Jacor'' means defendant Jacor Communications, Inc., an Ohio

corporation with its headquarters in Cincinnati, Ohio and includes its

successors and assigns, its subsidiaries, and directors, officers,

managers, agents, and employees acting for or on behalf of Jacor.

B. ``Citicasters'' means defendant Citicasters Inc., a Florida

corporation with its headquarters in Cincinnati, Ohio, and includes its

successors and assigns, its subsidiaries, and directors, officers,

managers, agents, and employees acting for or on behalf of Citicasters.

C. ``WKRQ Assets'' means all of the assets, tangible or intangible,

used in the operation of the WKRQ-FM radio station ``WKRQ'') in

Cincinnati, Ohio, including but not limited to: all real property

(owned and leased) used in the operation of WKRQ; all broadcast

equipment, personal property, inventory, office furniture, fixed assets

and fixtures, materials, supplies and other tangible property used in

the operation of WKRQ; all licenses, permits and authorizations and

applications therefor issued by the Federal Communications Commission

(``FCC'') and other governmental agencies relating to WKRQ; all

contracts, agreements, leases and commitments of Citicasters pertaining

to WKRQ and its operations; all trademarks, service marks, trade names,

copyrights, patents, slogans, programming materials and promotional

materials relating to WKRQ; and all logs and other records maintained

by Citicasters or WKRQ in connection with the station's business. For

all assets used jointly by WKRQ and WWNK-FM or WKRC-TV prior to the

divestiture required by this Final Judgment, Jacor shall propose to

plaintiff, within 7 days of the consummation of the Jacor/Citicasters

Transaction, a plan for dividing such assets among these stations. Upon

approval of the plan by plaintiff, the term``WKRQ Assets'' shall

include only those assets allocated under the plan to WKRQ.

D. ``Jacor Cincinnati Radio Station'' means each broadcast radio

station that is licensed to a community in the Cincinnati Area, and

that Jacor owns, operates, manages, or has an interest in, or for which

Jacor sells more than 20 percent of its advertising time.

E. ``Non-Jacor Radio Station'' means any radio broadcast station

licensed to a community in the Cincinnati Area that is not a Jacor

Cincinnati Radio Station.

F. ``Cincinnati Area'' means the Cincinnati, Ohio DMA as identified

by The Arbitron Radio Market Report for Cincinnati (Winter 1996).

G. ``Jacor/Citicasters Transaction'' means the proposed acquisition

of Citicasters by Jacor contemplated by the Agreement and Plan of

Merger, dated as of February 12, 1996.

III. Applicability

The provisions of this Final Judgment apply to each of the

defendants, its successors and assigns, its subsidiaries, directors,

officers, managers, agents, and employees, and all other persons in

active concert or participation with any of them who shall have

received actual notice of this Final Judgment by personal service or

otherwise.

IV. Divestiture of WKRQ

A. Jacor is hereby ordered and directed, in accordance with the

terms of this Final Judgment, within six (6) months after the filing of

this Final Judgment, to divest the WRRQ Assets to a purchaser

acceptable to plaintiff. 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 be accomplished

in such a way as to satisfy plaintiff, in its sole discretion, that the

WKRQ Assets can and will be used by the purchaser as a viable, ongoing

business. The divestiture, whether pursuant to Sections IV or V of this

Final Judgment, shall be made (i) to a purchaser that, in the

plaintiff's sole judgment, has the capability and intent of competing

effectively, and has the managerial, operational, and financial

capability to compete effectively as a radio station in the Cincinnati

Area; and (ii) pursuant to an agreement the terms of which shall not

interfere with the ability of the purchaser to compete effectively.

B. Defendants agree to use their best efforts to accomplish the

divestiture as expeditiously and timely as possible. Plaintiff, in its

sole discretion, may extend the time period for the divestiture for two

additional periods of time not to exceed sixty (60) calendar days in

toto.

C. In accomplishing the divestiture ordered by this Final Judgment,

defendants promptly shall make known, by usual and customary means, the

availability of the WKRQ Assets. Defendants shall inform any person

making a bona fide inquiry regarding a possible purchase that the sale

is being

[[Page 42655]]

made pursuant to this Final Judgment and provide such person with a

copy of this Final Judgment. Defendants shall make known to any person

making an inquiry regarding a possible purchase of the WKRQ Assets that

the assets described in Section II (C) 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 WKRQ Assets customarily provided in a due

diligence process except such information 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.

D. Defendants shall permit bona fide prospective purchasers of the

WKRQ 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 customarily provided as part of a due diligence

process.

V. Appointment of Trustee

A. In the event that Jacor has not divested the WKRQ Assets within

six months of the filing of this Final Judgment with the Court, or

within any extension granted under Section IV, the Court shall appoint,

on application of the plaintiff and consistent with the rules of the

FCC, a trustee selected by the 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 WKRQ 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 Sections V and VI of this Final Judgment, and

shall have 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

investments 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, and shall have such other powers as this Court shall deem

appropriate. Defendants shall not object to the sale of the WKRQ 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 VI 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 WKRQ 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 WKRQ Assets and

defendants shall develop such financial or other information as may be

necessary to the divestiture of the WKRQ Assets. Defendants shall

permit prospective purchasers of the WKRQ 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 the parties and the Court setting forth the

trustee's efforts to accomplish divestiture of the WKRQ 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 WKRQ 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 operations.

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

the parties, who 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, which shall, if necessary, include

extending the term of the trustee's appointment.

VI. Notification

Within two (2) business days following execution of a definitive

agreement, to effect, in whole or in part, any proposed divestiture

pursuant to Sections IV or V of this Final Judgment, Jacor 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 assets that are the subject of the binding

contract, 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 and the proposed purchaser or

purchasers. Defendants and the trustee shall furnish any additional

information requested within fifteen (15) calendar days of the receipt

of the request, unless the parties shall otherwise agree. Within thirty

(30) calendar days after receipt of the notice or within twenty (20)

calendar days after plaintiff has been provided the additional

information requested from

[[Page 42656]]

defendants, the proposed purchaser or purchasers, any third party, and

the trustee, 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 provides written

notice to defendants and the trustee 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.

Absent written notice that plaintiff does not object to the proposed

purchaser or upon objection by plaintiff, a divestiture proposed under

Section IV shall not be consummated. 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.

VII. 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, Jacor shall deliver to plaintiff an

affidavit as to the fact and manner of defendants' compliance with

Sections 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, 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 WKRQ Assets, and shall

describe in detail each contact with any such person during that

period.

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

the WKRQ Assets pursuant to Section VIII of this Final Judgment. The

affidavit also shall describe, but not be limited to, defendants'

efforts to maintain and operate WKRQ as an active competitor, maintain

the management, sales, marketing and pricing of WKRQ apart from that of

the other Jacor Cincinnati Radio Stations, maintain and increase sales

of advertising time at WKRQ, and maintain the WKRQ Assets in operable

condition, continuing normal maintenance. Defendants shall deliver to

plaintiff an affidavit describing any changes to the efforts and

actions outlined in defendants' earlier affidavit(s) filed pursuant to

this Section within fifteen (15) calendar days after the change is

implemented.

C. Defendants shall preserve all records of all efforts made to

preserve and divest the WKRQ Assets.

VIII. Preservation of Assets/Hold Separate

Until the divestiture required by the Final Judgment has been

accomplished:

A. Defendants shall preserve, hold, and continue to operate the

business of WKRQ as an independent, ongoing, economically viable

business, with its assets, management, and operations separate,

distinct, and apart from the other Jacor Cincinnati Radio Stations.

Defendants shall maintain the business of WKRQ as a viable and active

competitor to the other Cincinnati radio stations, including the Jacor

Cincinnati Radio Stations.

B. Defendants shall not coordinate the marketing, promotion,

merchandising or terms of sale of advertising time on WKRQ with other

current or hereafter acquired Jacor Cincinnati Radio Stations. There

shall be no communications between personnel at WKRQ and those at other

Jacor Cincinnati Radio Stations relating to any confidential business

information, including any marketing, sales, pacing or rate information

relating to the sale of advertising time on radio stations in the

Cincinnati Area.

C. Defendants shall use all reasonable efforts to maintain and

increase sales of advertising time on WKRQ. In particular, defendants

shall, consistent with market conditions, provide promotional,

marketing and merchandising support for the sale of advertising time on

WKRQ, including maintaining or increasing expenditures designed to

promote WKRQ.

D. Defendants shall ensure that WKRQ has separate management,

programming, sales personnel and other employees from the other Jacor

Cincinnati Radio Stations, and ensure that the management, programming,

sales personnel and employees of other Jacor Cincinnati Radio Stations,

or anyone acting at their direction, do not influence or attempt to

influence, directly or indirectly, any operational, programming,

marketing or financial decisions of WKRQ, and vice versa.

E. Except in the ordinary course of business or as part of the

disposition of the WRKQ Assets under this Final Judgment, defendants

shall not, without the prior consent of plaintiff, sell, lease, assign,

transfer, or otherwise dispose of, or pledge for collateral for loans

(except such loans and credit facilities as are currently outstanding

or replacements or substitutes therefor), the WKRQ Assets, including

but not limited to the real estate, facilities, and equipment, all

tangible and intangible assets used in connection with WKRQ's format,

and all administrative, marketing, sales and support facilities,

related to the sale of advertising time on WRKQ.

F. Defendants shall provide and maintain sufficient working

capital, consistent with past practice, to maintain the WKRQ Assets as

a viable, ongoing business.

G. Defendants shall provide and maintain sufficient lines and

sources of credit, consistent with past practice, to maintain the

general business operations of WKRQ as a viable, ongoing business.

H. Consistent with the stations' existing practices, defendants

shall maintain, in accordance with sound accounting practices,

separate, true and complete financial ledgers, books and records

reporting the profits and losses of WKRQ on a monthly and quarterly

basis.

I. Defendants shall refrain from taking any action designed to

reduce the scope or level of competition between the general business

operations of WKRQ and other Cincinnati radio stations, including

current or hereafter acquired Jacor Cincinnati Radio Stations, or in

the sale of advertising time on radio stations in the Cincinnati Area,

without the prior consent of plaintiff.

J. Defendants shall refrain from taking any action designed to

jeopardize its ability to divest the WKRQ Assets as a viable, ongoing

business.

K. Defendants shall give five business days' prior notice to

plaintiff of its decision to terminate any WKRQ management staff, on-

air personality or sales employee.

L. Jacor shall not hire or contract to purchase services from any

WKRQ employee including management, sales or production staff or on-

air-personality.

M. Defendants shall give five business days' notice to plaintiff

prior to either (1) changing WKRQ's format from Contemporary Hits

Radio, or (2) Jacor changing the format of any current or hereafter

acquired Jacor Cincinnati Radio Stations to an Adult Hits, Top 40, Soft

Hits, Adult Contemporary, or to a similar format.

N. Defendants shall appoint a person or persons to oversee the WKRQ

Assets, and who will be responsible for defendants' compliance with

Section VIII of this Final Judgment.

IX. Notice

A. Unless such transaction is otherwise subject to the reporting

and waiting period requirements of the Hart-

[[Page 42657]]

Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C.

Sec. 18a (the ``HSR Act''), Jacor, without providing advance

notification to the United States Department of Justice, shall not

directly or indirectly:

(1) acquire any assets of, or any equity or management interest in,

any Non-Jacor Radio Station; provided, however, that Jacor need not

provide notice under this provision for any direct or indirect

acquisition of equity of a Non-Jacor Radio Station that would result in

Jacor's holding no more than five percent of the total equity of the

station; and provided further that assets for purpose of this Section

IX(A) means: (i) substantially all the assets of a Non-Jacor Radio

Station, or (ii) any trademarks, trade names, service marks, service

names, copyrights, or call letters, or programming the purchase of

which is accompanied by a non-compete covenant, whether or not the

acquired assets constitute substantially all the assets of a Non-Jacor

Radio Station; or

(2) enter into any agreement or understanding that would allow

Jacor to market or sell advertising time for any Non-Jacor Radio

Station; provided, however, that Jacor need not provide notice under

this provision for any such agreement or understanding: (i) that is

consideration for the sale by Jacor of proprietary news, weather or

traffic programming to any such Non-Jacor Radio Station and would

permit Jacor to sell no more than 5 percent of that station's

advertising time for any day and no more than 20 percent of that

station's advertising time for any hour segment, or (ii) that is

consideration for Jacor's granting to such station rebroadcast rights

for a sports event to which Jacor has exclusive broadcast rights, and

would permit Jacor to sell no more than 15 percent of such station's

advertising time for any day.

Notification 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 Jacor Cincinnati Radio Stations. Notification

shall be provided at least thirty (30) days prior to acquiring any such

interest covered in (1) or (2) 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 Department make a written request

for additional information, Jacor 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.

B. Jacor shall submit to the Department within ten (10) business

days following the end of each of Jacor's fiscal quarters a list of

each acquisition made by Jacor in that just-ended quarter of any assets

of a Non-Jacor Radio Station that was not subject to the reporting and

waiting period requirements of the HSR Act or to the notice and waiting

period requirements of Section IX(A); provided, however, that the

acquisition of physical assets valued at less than $25,000 need not be

included in the list. The list shall include the identity of the

parties to the transaction, the date of the transaction and a

description of the assets acquired.

X. Compliance Inspection

Only for the purposes 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 United States Department

of Justice, upon written request of the 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, shall

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 enforcement of

this Final Judgment; and

(2) Subject to the reasonable convenience of defendants and without

restraint or interference from it, to interview officers, employees,

and agents of defendants, who may have counsel present, regarding any

such matters.

B. Upon the written request of the 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 enforcement of this

Final Judgment.

C. No information or documents obtained by the means provided in

this Section X shall be divulged by plaintiff 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 the United

States 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

defendants to plaintiff, defendants represent and identify 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 defendants mark 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 defendants prior to divulging such

material in any legal proceeding (other than a grand jury proceeding).

XI. Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XII. Termination

Unless this Court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the date of its entry, except that

plaintiff, after five years from the date of this Final Judgment's

entry, in its sole discretion, may notify Jacor and the Court that

Jacor shall no longer be subject to Section IX.

XIII. Public Interest

Entry of this Final Judgment is in the public interest.

Dated: ________

----------------------------------------------------------------------

United States District Judge

The United States pursuant to Section 2(b) of the Antitrust

Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16 (b)-(h),

files this Competitive Impact Statement relating to the proposed Final

Judgment submitted for entry in this civil antitrust proceeding.

[[Page 42658]]

I. Nature and Purpose of the Proceeding

The plaintiff filed a civil antitrust complaint on August 5, 1996,

alleging that the proposed acquisition of Citicasters, Inc.

(``Citicasters'') by Jacor Communications, Inc. (``Jacor'') would

violate Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. Jacor and

Citicasters own and operate radio broadcast stations in various cities

across the United States, and they are the first and third largest

owners of radio stations in the Cincinnati, Ohio area.

The complaint alleges that the combination of these companies would

substantially lessen competition in the sale of radio advertising time

in Cincinnati, Ohio and the surrounding areas. The prayer for relief

seeks: (1) a judgment that the proposed acquisition would violate

Section 7 of the Clayton Act, 15 U.S.C. Sec. 18, and (2) a preliminary

and permanent injunction preventing Jacor and Citicasters from carrying

out the proposed merger.

Shortly before that suit was filed, a proposed settlement was

reached that permits Jacor to complete its acquisition of Citicasters,

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 Jacor to divest WKRQ-FM in

Cincinnati, which it will acquire from Citicasters in the proposed

transaction, including all the assets necessary to make WKRQ an

economically viable competitor in the Cincinnati radio market. Unless

the United States grants a time extension, Jacor must complete this

divestiture within six months after the entry of the Final Judgment. If

Jacor does not divest the WKRQ Assets during the divestiture period,

the Court may appoint a trustee to sell the assets. The proposed Final

Judgment further requires defendants to ensure that, until the

divestiture mandated by the Final Judgment has been accomplished, WKRQ

will be operated independently as a viable, ongoing business, and kept

separate and apart from Jacor's other Cincinnati radio stations.

Finally, the proposed Final Judgment requires Jacor to give the United

States prior notice as to certain future radio station acquisitions in

Cincinnati or agreements that would grant Jacor the right to sell

advertising time for non-Jacor radio stations in Cincinnati.

The United States and Jacor 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. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

Defendant Jacor is an Ohio corporation with its headquarters in

Cincinnati, Ohio. It currently owns and operates 22 stations in 7

cities.\1\ In 1995, Jacor reported total revenues of approximately $134

million, $40 million from operations in the Cincinnati area. Jacor owns

four Cincinnati radio stations, and sells advertising for three more

radio stations under joint sales agreements (``JSAs'').

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\1\ In a separate acquisition, Jacor plans to acquire Noble

Broadcast Group, Inc., which owns 10 radio stations.

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Citicasters is a Florida corporation headquartered in Cincinnati,

Ohio. Citicasters owns 19 radio stations in 8 cities, and also owns two

television stations. In 1995, Citicasters' total revenues were

approximately $60 million, $10 million from its Cincinnati radio

operations. Citicasters owns two radio stations in Cincinnati.

On February 12, 1996, Jacor agreed to purchase Citicasters for

approximately $770 million. This transaction, which would combine Jacor

and Citicasters, precipitated the Government's suit. As a result of the

proposed transaction, Jacor would own six major radio stations in

Cincinnati and control the sale of advertising time for three more.

B. Sale of Radio Advertising Time

The complaint alleges that the provision of advertising time on

radio stations serving the Cincinnati metropolitan area constitutes a

line of commerce and section of the country, or relevant market, for

antitrust purposes. Advertisers that seek to reach residents of the

Cincinnati area would not find radio stations that broadcast to other

areas to be acceptable substitutes for Cincinnati stations.

Radio stations earn money by selling broadcast time to advertisers.

Advertisers choose among radio stations by comparing differences among

the stations' rates, audience size, audience composition, and

availability of time for sale. An advertiser typically has a ``target

audience'' (young women, for example) that it seeks to reach when

marketing its product or service, and wants its target audience to have

substantial exposure to its message. To ensure this reach and

frequency, advertisers generally buy time on multiple radio stations in

the same market. Because a radio station bases its rates on the size of

its overall audience, advertisers prefer to advertise on stations that

are listened to primarily by their target audience.

For Cincinnati advertisers, radio is a qualitatively different

medium from television or newspapers. Perhaps most significantly, radio

gives Cincinnati advertisers the ability to reach target audiences far

more efficiently than other media. Cincinnati radio stations attract

different types of audiences by adopting different formats, such as

country or rock and roll. By choosing appropriate radio stations, a

Cincinnati advertiser can reach a large percentage of its target

audience without also reaching (and thus paying for) listeners outside

of its target. Although television and newspapers are good vehicles for

reaching a broad, undifferentiated audience, they generally lack

radio's ability to provide efficient targeting.

Radio advertisements are also comparatively inexpensive to produce,

and can be changed or modified easily and with little advance notice to

the radio station. This makes radio advertising especially attractive

to Cincinnati advertisers that need to change messages frequently (for

example, to advertise different items as being on sale each week), as

well as to companies with limited advertising budgets. Radio is also

the most effective medium for delivering a message to consumers when

they are traveling in their cars or outside their homes.

Radio thus has particular advantages for those seeking to place

low-cost, targeted or time-sensitive advertising. Many Cincinnati

advertisers therefore perceive radio as a distinct advertising medium

from television or newspapers. Accordingly, many are not likely to

switch any or some of their advertising budget from radio to other

media were radio prices to rise 5-10%.

Radio stations negotiate rates individually with each advertiser.

As an integral part of these negotiations, an advertiser will provide

the station with a description of its target audience, as well as the

reach and frequency it desires. Based on this information and the

station's knowledge of its competitors, the station can identify the

reasonable alternatives available to advertisers, and has the ability

to charge advertisers different rates, based on whether such

alternatives exist.

[[Page 42659]]

C. Anticompetitive Consequences of the Proposed Merger

The complaint alleges that Jacor's proposed acquisition of

Citicasters would lessen competition substantially in the provision of

advertising time on radio in the Cincinnati area. The proposed

acquisition would create further market concentration in an already

highly concentrated market, and Jacor would control a substantial share

of the advertising revenues in this market. Jacor presently controls

42% of all radio advertising revenues in Cincinnati, and its market

share would rise to 53% after the proposed merger. According to the

Herfindahl-Hirschman Index (``HHI''), a widely-used measure of market

concentration defined and explained in Appendix A, Jacor possesses a

pre-merger HHI of 2180, which would rise to 3077 after the merger.

Advertisers, at present, can choose among radio stations owned by

Jacor, Citicasters and others. When there are multiple stations that

could satisfy its needs, an advertiser can get competing bids from the

stations, and so obtain better rates or other special services from

them. After the merger, advertisers will have fewer radio companies to

choose from, and many will have to purchase advertising time from

Jacor/Citicasters so as to obtain the desired reach and frequency.

Advertisers will thus lose the benefits that the existing competition

between Jacor and Citicasters stations provides.

Currently, many advertisers feel that advertising on either one of

the Jacor-controlled stations, or on WKRQ, is very important. Many of

these advertisers' target audiences include young adults (listeners

aged 18 to 34). Thus, the Jacor stations and WKRQ compete against each

other for the business of advertisers trying to reach that audience,

and in rate negotiations, advertisers use this competition to get

better rates or increased services from the Citicasters and Jacor

stations. This competition will be eliminated by the merger.

Currently, advertisers trying to reach young adults could

efficiently reach this audience on the radio without having to use a

Jacor station. Post-merger, however, many of these advertisers will be

much more dependant on purchasing time from Jacor stations. Jacor could

accordingly raise its rates, and reduce the quality of its service, to

advertisers targeting young adults (or who need either the Jacor

stations or WKRQ for other reasons) who would have scant alternatives

to paying the increase, while maintaining lower rates for other

advertisers. This would make a price increase profitable even though

some advertisers could switch to other radio stations.

Non-Jacor radio stations in Cincinnati are not likely to respond to

Jacor's increased prices after the acquisition by changing formats so

as to attract a greater number of young adults. Most radio stations

change format only when their existing formats are losing money. A

station is also unlikely to change its format solely in response to

higher prices being charged by a large established company that

controls a number of stations in the market, such as Jacor.

Entry by new radio stations in this market is unlikely. The FCC is

unlikely to grant a license to a new radio station, as there is

insufficient spectrum to accommodate a new signal without interfering

with existing signals. In addition, radio stations sited in nearby

communities cannot easily boost their signal power so as to provide

better coverage and thereby enter the Cincinnati market. Boosting a

signal would interfere with neighboring stations on the same or similar

frequencies, a violation of FCC regulations.

For these reasons, the Department concludes that the merger as

proposed would substantially lessen competition in the sale of radio

advertising time in the Cincinnati area, eliminate actual competition

between Jacor and Citicasters, and result in increased rates for radio

advertising time in the Cincinnati metropolitan area, 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 Cincinnati metropolitan market. It

requires the divestiture of WKRQ-FM, the station owned by Citicasters

that competes most directly with Jacor stations for advertising dollars

targeted to young adults. As a result of this divestiture, WKRQ-FM will

remain as a strong competitor to the Jacor stations. The divestiture

will preserve choices for advertisers and help ensure that radio

advertising rates in Cincinnati do not increase as a result of the

acquisition.

Unless the United States grants a time extension, this divestiture

of WKRQ must be accomplished by Jacor within six months after entry of

the Final Judgment. The defendants must divest the assets and rights

associated with WKRQ in such a way as to satisfy the plaintiff that the

station can and will be operated as a viable, ongoing business, and

that until the divestiture, the station will be maintained as an

independent competitor to the other stations in the Cincinnati area,

including the Jacor stations.

If the defendants fail to divest WKRQ within the six months after

entry of Final Judgment, or extension thereof, the Court, upon

application of the United States, shall appoint a trustee nominated by

the United States to effect the divestiture. If a trustee is appointed,

the proposed Final Judgment provides that Jacor 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 WKRQ 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 parties 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 parties, who

will each have the right to be heard and to make additional

recommendations consistent with the purpose of the trust.

The proposed Final Judgment requires that Jacor maintain WKRQ

separate and apart pending divestiture. The Judgment also contains

provisions to ensure that the assets of WKRQ will be preserved so that

the station after divestiture will remain a viable, aggressive

competitor.

The proposed Final Judgment also prohibits Jacor from entering into

certain agreements with other Cincinnati radio stations without

providing at least thirty (30) days notice to the Department of

Justice. Specifically, Jacor must notify the Department before

acquiring any significant interest in another Cincinnati radio station,

which would raise competitive concerns but might well be too small to

be reported under the Hart-Scott-Rodino (``HSR'') premerger

notification process. In addition, Jacor may not agree to sell radio

advertising time for any other Cincinnati radio station, without

providing such notice.

[[Page 42660]]

This provision ensures that the Department will receive advance notice

of any acquisition, or agreements, through which Jacor will increase

the amount of advertising time on radio stations that it can sell. In

particular, this provision will require Jacor to notify the Department

before it enters into any more joint sales agreements (``JSAs'') or

limited management agreements (``LMAs'') with other stations in the

Cincinnati area. Such agreements, whereby Jacor sells advertising for

or manages other area radio stations, would effectively increase

Jacor's market share in Cincinnati. In analyzing the Cincinnati radio

market, the Department treated Jacor's three present JSA stations as if

Jacor owned them outright. Despite their clear competitive

significance, a JSA or an LMA probably would not be reportable to the

Department under HSR. Thus, this provision in the decree 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 Cincinnati market.

The relief in the proposed Final Judgment is intended to remedy the

competitive effects of the proposed acquisition of Citicasters by

Jacor. Nothing in this Final Judgment is intended to limit the

plaintiff's ability to investigate or bring actions, where appropriate,

challenging other past or future activities of Jacor in the Cincinnati

area, including its entry into JSAs, LMAs or other agreements related

to the sale of advertising time on non-Jacor stations.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. Sec. 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.

Sec. 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 United States 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 United States 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 United States will be

filed with the Court and published in the Federal Register.

Written comments should be submitted to: Donald J. Russell, Chief,

Telecommunications Task Force, Antitrust Division, United States

Department of Justice, 555 4th Street, N.W., Room 8104, Washington,

D.C. 20001.

The proposed Final Judgment provides that the Court retains

jurisdiction over this action, and 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 WKRQ and other relief contained in the proposed Final Judgment will

preserve viable competition in the sale of radio advertising time in

the Cincinnati metro area. 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.C. Sec. 16(e) (emphasis added). 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,

\2\ 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. Sec. 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.

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[a]bsent a showing of corrupt failure of the government 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. para.

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.

[[Page 42661]]

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\

\3\ Bechtel, 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).

---------------------------------------------------------------------------

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\

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\4\ United 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).

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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.

Dated: August 2, 1996.

Respectfully submitted,

Nancy M. Goodman,

Assistant Chief, Telecommunications Task Force, U.S. Department of

Justice, Antitrust Division, 555 4th Street, N.W., Room 8104,

Washington, D.C. 20001, (202) 514-5621.

Exhibit A--Definition of HHI and Calculations for Market

``HHI'' means the Herfindahl-Hirschman 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 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 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 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 Sec. 1.51.

Based on available radio advertising revenues, the pre-merger HHI

for the Cincinnati area radio market is 2180. After the proposed merger

the HHI would be 3077, an increase of 897 points.

[FR Doc. 96-20860 Filed 8-15-96; 8:45 a.m.]

BILLING CODE 4410-01-M