Broadcast Services; Radio Stations, Television Stations

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[MM Docket No. 98-35; FCC: 98-37]

Broadcast Services; Radio Stations, Television Stations

AGENCY: Federal Communications Commission.

[[Page 15354]]

ACTION: Review of rules; notice of inquiry.

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SUMMARY: Pursuant to the requirements of Section 202(h) of the

Telecommunications Act of 1996, the Commission issues this Notice of

Inquiry soliciting comment on whether any or all of its broadcast

ownership rules are no longer in the public interest as the result of

competition.

DATES: Comments are due by May 22, 1998, and reply comments are due by

June 22, 1998.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W.,

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Roger Holberg, Mass Media Bureau,

Policy and Rules Division (202)418-2134 or Dan Bring, Mass Media

Bureau, Policy and Rules Division (202)418-2170.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's

Notice of Inquiry in MM Docket No. 98-35, FCC 98-37, adopted March 12,

1998, and released March 13, 1998. The complete text of this Notice of

Inquiry is available for inspection and copying during normal business

hours in the FCC Reference Center (Room 239), 1919 M Street, N.W.,

Washington, D.C., and may also be purchased from the Commission's copy

contractor, International Transcription Service, (202)857-3800, 1231

20th Street, N.W., Washington, D.C. 20036. The Notice of Inquiry is

also available on the Internet at the Commission's web site: http://

www.fcc.gov.

Synopsis of Notice of Inquiry

I. Introduction

1. This Notice of Inquiry is the first step in our biennial

ownership review of the broadcast ownership and other rules as required

by section 202(h) of the Telecommunications Act of 1996 (``Telecom

Act'').1 That section provides:

\1\ Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat.

56 (1996). Also required by that section is the biennial review of

rules adopted pursuant to sections 202(a)-(f) of the

Telecommunications Act. These include rules pertaining to cable as

well as broadcast cross-ownership.

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The Commission shall review its rules adopted pursuant to this

section and all of its ownership rules biennially as part of its

regulatory reform review under section 11 of the Communications Act

of 1934 and shall determine whether any of such rules are necessary

in the public interest as the result of competition. The Commission

shall repeal or modify any regulation it determines to be no longer

in the public interest.

Section 11 of the Communications Act of 1934, as

amended,2 similarly provides that under the statutorily

required review, the Commission ``shall determine whether any such

regulation is no longer necessary in the public interest as a result of

meaningful economic competition'' and requires that the Commission

``shall repeal or modify any regulation it determines to be no longer

necessary in the public interest.''

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\2\ 47 U.S.C. 161.

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2. Once this phase is completed, we will review the comments and

issue a report. In the event we conclude there is good reason to

believe that any of the rules within the scope of the review, or

portions thereof, should be repealed or modified, we will issue the

appropriate Notice(s) of Proposed Rule Making.

II. Framework for Review

3. For more than a half century, the Commission's regulation of

broadcast service has been guided by the goals of promoting competition

and diversity.3 Competition is an important part of the

Commission's public interest mandate because it promotes consumer

welfare and the efficient use of resources.4 Diversity,

particularly diversity of viewpoints, is the other important part of

the Commission's public interest mandate. The Commission's viewpoint

diversity objective promotes a goal the Supreme Court has stated

underlies the First Amendment. As the Court has said, the First

Amendment ``rests on the assumption that the widest possible

dissemination of information from diverse and antagonistic sources is

essential to the welfare of the public* * *.'' 5 Promoting

diversity in the number of separately owned outlets has contributed to

our goal of viewpoint diversity by assuring that the programming and

views available to the public are disseminated by a wide variety of

speakers. Moreover, our diversity concerns are separate from our goal

of promoting competition. Indeed, the Supreme Court has recently stated

that ``[f]ederal policy* * *has long favored preserving a multiplicity

of broadcast outlets regardless of whether the conduct that threatens

it is motivated by anticompetitive animus or rises to the level of an

antitrust violation.'' 6

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\3\ For a short history of the Commission's broadcast ownership

regulations, see Further Notice of Proposed Rule Making in MM Docket

Nos. 91-221 and 87-8, 10 FCC Rcd 3524, 3526-29 (1995)(hereinafter

``TV Ownership Further Notice'').

\4\ Revision of Radio Rules and Policies, 7 FCC Rcd 2755 (1992),

recon. granted in part, 7 FCC Rcd 6387 (1992), further recon., 9 FCC

Rcd 7183 (1994).

\5\ Associated Press v. United States, 326 U.S. 1, 20 (1945);

accord Federal Communications Commission v. National Citizens

Committee for Broadcasting, 436 U.S. 775 (1978).

\6\ Turner Broadcasting System, Inc. v. FCC, 117 S.Ct. 1174

(1997)(citations omitted).

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4. We also note that the definition of economic markets (i.e.,

product and geographic markets) is an important step in the assessment

of current levels of competition that section 202(h) and section 11

require in order to determine whether such competition has eliminated

the need for our broadcast rules. The Commission has previously

identified three economic markets in which broadcasters operate: the

market for delivered video programming; the advertising market; and the

program production market. In addition, we tentatively considered that

cable television directly competes with broadcast television stations

in each of these markets, and that broadcast radio and newspapers

compete with television in the local advertising market. While we also

sought comment on whether other suppliers of video programming (e.g.,

Multichannel Multipoint Distribution Service (MMDS), Direct Broadcast

Satellite (DBS), etc.) compete with broadcast television stations, we

stated that it may not be appropriate to include them because their

current market penetration is so low that they are not relevant

substitutes to a majority of Americans.7 Commenters are

invited to address the correctness of these tentative considerations,

as well as their applicability to the instant proceedings. After

exploring the issue of which media compete with broadcasting in each of

the economic markets, the competitive analysis then focuses upon

whether and to what extent market power exists and is being exercised,

and what effect our ownership rules have on the existence and exercise

of market power in each of these markets.

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\7\ TV Ownership Further Notice, supra at 3538.

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5. Our diversity analysis focuses upon the ability of broadcast and

non-broadcast media to advance the three types of diversity (i.e.,

viewpoint, outlet and source) our broadcast ownership rules have

attempted to foster. Viewpoint diversity refers to helping to ensure

that the material presented by the media reflect a wide range of

diverse and antagonistic opinions and interpretations. Outlet diversity

refers to a variety of delivery services (e.g., broadcast stations,

newspapers, cable and DBS) that select and present programming directly

to the public. Source diversity refers to promoting a variety of

program or information

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producers and owners.8 In the TV Ownership Further Notice we

sought comment on whether nonbroadcast outlets contributed to our

diversity goals. We tentatively considered that cable television, as

well as broadcast television, provides diversity in this market given

that cable has the capability for local origination of programming.

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\8\ See TV Ownership Further Notice, supra at 3547-51.

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6. We propose to apply this framework to evaluate whether our rules

continue to be in the public interest as required by the Telecom Act.

We seek comment on this proposal. In performing our section 202(h)

review, we will consider the effect of meaningful competition that has

developed and the extent to which this competition has been furthered

by our rules. We also seek comment on the relevance to the framework of

the Commission's assessment of the state of competition in the multi-

channel video programming delivery services (MVPDs) market contained in

the Cable Competition Report,9 which was released subsequent

to our TV Ownership Further Notice. Furthermore, we seek comment on how

the Commission's assessment of the competitive effects of the Bell

Atlantic/NYNEX merger bears on our analysis here.10 We also

seek data, studies and any other information relevant to our

consideration of these competition and diversity issues.

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\9\ Fourth Annual Report, in the Matter of Annual Assessment of

the Status of Competition in Markets for the Delivery of Video

Programming, CS Docket 97-141 (adopted December 31, 1997) (''Video

Competition Report'').

\10\ See Memorandum Opinion and Order In the Application of

NYNEX Corporation, 12 FCC Rcd 19985 (1997).

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III. Rules To Be Reviewed

7. In this Notice of Inquiry we describe each of the rules that are

within the scope of our biennial broadcast ownership review. We seek

comment on any other rules commenters believe should be included in

this review. The rules are grouped into three categories. The first

group are those broadcast ownership rules that are currently being

examined in pending Commission proceedings. The second group are those

broadcast ownership rules that have recently been changed to implement

provisions of the Telecom Act of 1996.11 Finally, the third

group are the remaining broadcast ownership rules.

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\11\ We will not be reviewing herein the elimination of national

radio ownership limits (Order, 11 FCC Rcd 12368 (1996)) or cable/

network cross-ownership restrictions (Order in CS Docket No. 96-56,

11 FCC Rcd 15115 (1996)) because neither is a ``rule adopted

pursuant to'' section 202(h) or an existing broadcast ownership

rule. Additionally, although these subjects are referred to in

section 202(f)(2) of the Telecom Act, the Commission has not revised

any rules pertaining to ensuring cable carriage, channel

positioning, or nondiscriminatory treatment of broadcast stations by

cable systems. Accordingly, these subjects, will not be expressly

and separately addressed except as set forth.

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Rules Currently Subject to Outstanding Proceedings

8. Several of the Commission's broadcast ownership rules are

currently the subject of open proceedings. They are as follows:

The television ``duopoly'' rule, which states that a party

may not own, operate or control two or more broadcast television

stations with overlapping ``Grade B'' signal contours.12

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\12\ 47 CFR 73.3555(b). This rule is currently under

consideration in MM Docket Nos. 91-221 and 87-8. See Notice of

Proposed Rule Making in MM Docket No. 91-221, 7 FCC Rcd 4111(1992);

TV Ownership Further Notice, supra; Second Further Notice of

Proposed Rule Making in MM Docket Nos. 91-221 and 87-8, 11 FCC Rcd

21655 (1996).

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The ``one-to-a-market'' rule, which generally prohibits

the common ownership of a television and a radio station in the same

market.13 In 1989, the Commission amended the rule to

specify that it would ``look favorably'' on requests for waiver of the

restriction in the Top 25 television markets if, after the merger, at

least 30 independently owned broadcast voices remained, or if the

merger involved a ``failed station.'' Case-by-case review of waiver

requests is also provided for in instances where the presumptive waiver

criteria are not present. Section 202(d) of the Telecom Act directed

the Commission to extend its presumptive waiver policy to the Top 50

television markets if it finds that doing so would be in the public

interest.14

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\13\ 47 CFR 73.3555(c). This rule is also currently under review

in MM Docket Nos. 91-221 and 87-8.

\14\ See note 12, supra.

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the daily newspaper/radio cross-ownership rule

15 which generally prohibits the common ownership of a daily

newspaper and a radio station in the same community. The outstanding

proceeding examines whether the Commission should modify the existing

waiver policy for this rule.16

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\15\ 47 CFR 73.3555(d). The rule applies to all newspaper/

broadcast cross-ownership situations. Only the waiver policy with

respect to newspaper/radio combinations is currently under review in

another proceeding.

\16\ See Notice of Inquiry in MM Docket No. 96-197, 11 FCC Rcd

13003 (1996).

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9. We believe that our ongoing review of these rules in the

outstanding proceedings satisfies the requirements of section 202(h) of

the Telecom Act.17 We anticipate taking action in those

proceedings during 1998 independently of the instant review. We

consequently seek no additional comment on these rules in this Notice

of Inquiry. Nor do we seek comment on our attribution standards. Our

attribution rules define what the Commission will consider a cognizable

interest for purposes of its ownership rules. They do not of themselves

establish limits on ownership or restrict cross-ownership combinations.

Furthermore, they are currently under consideration in MM Docket Nos.

94-150, 92-51, and 87-154.18

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\17\ In the Conference Report accompanying the Telecom Act, it

is stated that the, ``conferees are aware that the Commission

already has several broadcast deregulation proceedings underway. It

is the intention of the conferees that the Commission continue with

these proceedings and conclude them in a timely manner.'' H.R. Rep.

104-458, at 164.

\18\ See Notice of Proposed Rule Making in MM Docket Nos. 94-150

et al., 10 FCC Rcd 3606 (1995); Further Notice of Proposed Rule

Making in MM Docket Nos. 94-150 et al., 11 FCC Rcd 19895 (1996).

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Rules Recently Changed by Section 202 of the Telecom Act

10. The Commission modified/eliminated several of its ownership

rules in accordance with section 202 of the Telecom Act. Section 202(h)

of the Act directs the Commission, without limitation, to review its

broadcast ownership rules as part of the biennial ownership review.

Parties are invited to provide data or other information which would

indicate whether some, or all, of the remaining rules are no longer in

the public interest. In this proceeding we will review the impact of

the remaining rules on competition and diversity and discuss our

analysis in the report we issue.

11. In the course of this review, we will examine the effect these

rule changes have had, thus far, on the structure and trends in media

markets and their impact on our competition and diversity goals. We

propose to make this assessment by developing a record examining the

changes in the structure of the industry (horizontal concentration and

vertical integration) and financial performance in media markets, as

well as changes in diversity. Examining the structure of an industry

provides information about the industry's conduct and performance. For

example, horizontal concentration can give firms sufficient market

power to raise rates above competitive levels or otherwise engage in

anti-competitive activity, although it can also result in new

efficiencies that accrue to the

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benefit of consumers. Examining changes in ownership will provide

information on the effects on diversity.

12. Parties are invited to provide us with relevant information,

but our review will also be informed by publicly available information,

e.g., BIA and Compustat. Toward this end, we include data and a

preliminary assessment of some of these effects. We invite parties to

comment on the information we present as well as to provide additional

data that will shed light on the effects of these rule changes in the

media market.

13. National Television Ownership Rule. Section 202(c)(1) of the

Telecom Act directed the Commission to modify its rules to eliminate

the numerical limit on the number of broadcast television stations a

person or entity could own nationwide and to increase the audience

reach cap on such ownership from 25 percent to 35 percent of television

households. The Commission amended section 73.3555(e) of its Rules to

reflect this change.19

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\19\ Order, 11 FCC Rcd 12374 (1996).

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14. It is clear that there has been some consolidation of

television stations since the Telecom Act. However, most of the top 25

television group owners remain significantly below the 35 percent reach

cap, with only Fox's and CBS's television stations reaching more than

30 percent of U.S. households. The industry continues to be

unconcentrated at the national level, with our estimate of the

Herfindahl-Hirschman Index (HHI) still below 1000, increasing from 264

in 1996 to 308 in 1997.20

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\20\ The HHI is a standard measure of economic concentration.

The Department of Justice uses the HHI as part of its evaluation of

market competition. They generally consider a market to be

unconcentrated if the HHI is below 1000. HHIs are calculated by

summing the square of each television owner's percentage of total

television station revenues. The data for our estimate of the HHI

comes from the BIA database which estimates station, owner, and

market revenues. The revenue estimate combines national and local

advertising revenue for each station, owner, and market. The 1997

HHI uses 1997 ownership data, combined with 1996 revenues, and the

1996 HHI uses 1996 ownership data, combined with 1995 revenues.

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15. We seek comment on the effect of this rule on competition and

diversity and whether this rule is no longer necessary in the public

interest as the result of competition. What effect has it had on

competition in the national advertising market or the program

production market at the national level? How does the rule affect

existing television networks or the formation of new networks? We also

seek information on the extent of economies of scale realized as a

result of the consolidation permitted by the Telecom Act.

16. Local Radio Ownership Rules. Section 202(b) of the Telecom Act

directed the Commission to relax its radio multiple ownership rules to

allow common ownership of up to eight radio stations on the local

level, depending on the number of stations in the market. The

Commission has revised its Rules to reflect this mandate.21

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\21\ Section 202(a) of the Telecom Act directed the Commission

to eliminate its national radio ownership restrictions. The

Commission amended its rules so that there are now no limits on the

number of radio stations that may be owned nationally. Order, 11 FCC

Rcd 12368 (1996).

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17. We will include in the record of this proceeding an FCC staff

report which reviews the response of the radio industry to the revised

rules from March, 1996 to November, 1997. We invite comment on the

information set forth in this staff report. As the report documents,

the number of commercial radio stations has increased 2.5 percent from

10,222 to 10,475. At the same time, there has been a tremendous

increase in the number of station transactions since the passage of the

Telecom Act resulting in an increase in industry concentration. At the

national level, the number of owners of commercial radio stations has

declined by 11.7 percent from 5,105 to 4,507. This decline is primarily

due to mergers between existing owners. The result of these mergers has

been to change the ranking and composition of the top radio station

owners.

18. At the local level, there has been a downward trend in the

number of radio station owners in Arbitron radio Metro markets. The

average number of radio station owners across all radio Metro markets

declined from 12 to 11, a loss of about one owner per market. The top

10 radio Metro markets experienced an average loss of 3 owners per

market, from about 30 owners to about 27 owners per market. The

smallest radio Metro markets (markets 101-265) experienced an average

loss of about one owner per market, from about 9 owners to 8 owners.

Further, the top owners in each Metro market generally account for an

increasing share of total radio advertising revenues in these markets.

For example, the top four radio owners in each Metro market, on

average, account for about 90 percent of their Metro market's total

revenues, compared to about 80 percent in March, 1996. The staff report

also indicates that the average number of distinct radio formats across

all radio Metro markets is 10, remaining unchanged from March, 1996, to

March, 1997.

19. At the industry level, the staff report indicates that publicly

traded companies whose primary business is radio broadcasting are

experiencing robust financial performance. Operating margins have

increased slightly, while their profit margins have varied. This is

largely a result of their increased debt loads. Advertising revenues

have been sufficient, to date, to generate positive cash flow on an

industry-wide basis. This health is reflected in stock returns better

than those of the typical S&P 500 company. The market's valuation of

radio companies suggests that the market is foreseeing future earnings

growth in this industry. The observed consolidation of the radio

industry appears to have had positive financial consequences for these

radio companies.

20. We invite parties to comment on the effect of the local radio

ownership limits on competition in radio. What has been the effect on

competition in the program delivery market? What has been the effect on

competition in the local advertising market? In this regard, the TV

Ownership Further Notice noted that television (broadcast and cable)

and newspapers provided some level of competition to radio in the local

advertising market.22 Is there greater efficiency at the

local level due to consolidation? We ask commenters to provide data

documenting any economic efficiencies and specific cost savings.

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\22\ The program production market is national in scope and is,

thus, unaffected by changes in the local radio rule. We further note

that in reviewing radio station mergers under the antitrust laws,

the Department of Justice has taken the position that radio stations

form a distinct local advertising market and that newspapers, cable,

and broadcast television stations are not effective substitutes to

radio stations in this market. See Address of Joel I. Klein,

Assistant Attorney General, Antitrust Division of the Department of

Justice, ``DOJ Analysis of Radio Mergers'' (Feb. 19, 1997)

(available at http://www.usdoj.gov/atr/speeches/jik97219.htm).

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21. We also seek comment on the impact on diversity in radio. Are

the current ownership limits set forth in our rules no longer necessary

in the public interest? For example, has coverage of news and public

affairs been enhanced as a result? We also note that there has been a

drop in the number of minority-owned radio broadcast stations, as

reported in the annual report released by National Telecommunications

and Information Administration.23 It has been argued that

the change in the radio ownership rules has been detrimental to the

enhancement of ownership by

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minorities and women in the provision of radio service. The Commission

has a statutory obligation under section 309(j) of the Act as well as

an historic commitment to encouraging minority participation in the

telecommunications industry.24 We seek comment on the

relationship between these ownership limits and the opportunity for

minority broadcast station ownership. We also seek comment on any

similar effects on female ownership of broadcast facilities. We invite

commenters to address judicial considerations in this regard.

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\23\ Minority Commercial Broadcast Ownership in the U.S., a

report of the Minority Telecommunications Development Program,

National Telecommunications and Information Administration (August

1997). In this report, the number of minority-owned commercial radio

stations declined from 312 in 1995 to 284 in 1996/97. There are no

statistics available concerning female ownership of broadcast

facilities.

\24\ For a brief historic overview, see generally Notice of

Proposed Rule Making in MM Docket Nos. 94-149 and 91-140, 10 FCC Rcd

2788 (1995).

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22. We invite comment on whether, given the issues raised above, we

should modify the local radio ownership rules in any respect.

Specifically, we seek comment on whether the way in which we count

stations for purposes of applying our local radio ownership rule should

remain the same or be modified in order to more realistically account

for the number of stations in a market. We ask parties to be specific

in any such proposals they advocate.

23. Dual Network Rule. Section 202(e) of the Telecom Act directed

the Commission to revise its ``dual network'' rule.25 Under

the prior dual network rule, the Commission generally prohibited a

party from affiliating with a network organization that maintained more

than one network of television broadcast stations. The Telecom Act

directed the Commission to revise the rule to permit a television

broadcast station to affiliate with a person or entity that maintains

two or more networks of television broadcast stations unless such

networks are composed of: 1) two or more persons or entities that were

``networks'' on the date the Telecom Act was enacted; 26 or

2) any such network and an English-language program distribution

service that on the date of the Telecom Act's enactment provided 4 or

more hours of programming per week on a national basis pursuant to

network affiliation arrangements with local television broadcast

stations in markets reaching more than 75 percent of television

households.27 The Commission amended its dual network rule

to reflect this directive.28 We believe, at this time, that

no broadcast television network has begun to deliver a dual stream of

video programming. We seek comment on whether the current dual network

rule is no longer in the public interest.

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\25\ 47 CFR 73.658(g).

\26\ A ``network'' is defined with reference to 47 CFR

73.3613(a)(1) for this purpose.

\27\ The Conference Report stated that the Commission was being

directed to revise its dual network rule ``to permit a television

station to affiliate with a person or entity that maintains two or

more networks unless such dual or multiple networks are composed of

(1) two or more of the four existing networks (ABC, CBS, NBC, FOX)

or, (2) any of the four existing networks and one of the two

emerging networks (WBTN, UPN).'' S. Rep. No. 230, 104th Cong., 2d

Sess. at 163.

\28\ Order, 11 FCC Rcd 12374 (1996).

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The Remaining Rules

24. The UHF Television Discount. The national television ownership

rule states that an entity may own any number of television stations

(subject to the restrictions of the local ownership rule) so long as

the combined audience reach of the stations does not exceed 35 percent,

as measured by the number of television households in their respective

ADIs. Under our rules, UHF television stations are attributed with 50

percent of the television households in their ADI market.29

The Commission has stated that it would review the UHF discount in the

biennial ownership review.30

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\29\ 47 CFR 73.3555(e)(2)(i).

\30\ Notice of Proposed Rule Making in MM Docket Nos. 96-222,

91-221 and 87-8, 11 FCC Rcd 19949, 19956 (1996).

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25. The Commission adopted the UHF discount in 1985 due to concerns

that UHF station signals generally cannot reach as large an audience as

VHF station signals.31 Since that time we have observed in

other contexts that this UHF signal disparity has been ameliorated over

the years.32 This is due in part to improved television

receiver designs, as well as the fact that many households receive

broadcast channels via cable rather than by over-the-air transmission.

When the UHF discount was adopted in 1985, cable passed approximately

60 percent of all television households 33 and had

approximately 32 million subscribers.34 Today, the pass rate

has risen to 97.1 percent with approximately 64.2 million

subscribers.35 Moreover, the Supreme Court has recently

upheld the constitutionality of the ``must-carry'' rules which require

cable systems to carry local television broadcast

stations.36 Parties have nonetheless urged us to continue

the UHF discount policy given the significant number of television

households that do not subscribe to cable.37

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\31\ See Memorandum Opinion and Order in Gen. Docket No. 83-

1009, 100 FCC 2d 74, 92-94 (1985).

\32\ See Report and Order in MM Docket No. 94-123, 11 FCC Rcd

546, 583-86 (1995) (repealing the prime time access rule); Report

and Order in MM Docket No. 87-68, 3 FCC Rcd 638 (1988), clarified 4

FCC Rcd 2276 (1989) (eliminating the policy under which applications

to initiate or improve VHF service were considered contrary to the

public interest if they threatened adverse economic impact on

existing or potential UHF stations).

\33\ Estimate based on data in Television Factbook (Cable and

Services volume, 1986 ed.), pp. A39 and A44.

\34\ See 1997 Television and Cable Factbook at F-1.

\35\ Fourth Annual Report, supra at para. 14-15.

\36\ Turner Broadcasting Systems., Inc. v. FCC, 117 S. Ct. 1174

(1997).

\37\ See Notice of Proposed Rule Making in MM Docket No. 96-222,

11 FCC Rcd 19952-54 (1996) (summarizing comments on issue of whether

UHF discount policy should be retained).

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26. We request comment in this proceeding on whether the UHF

discount should be retained, modified, or eliminated. In this regard,

commenters may wish to address whether the discount, at its current

level, remains appropriate in light of the decreasing disparity between

VHF and UHF television due to improvements in transmission and

reception technology, cable carriage of UHF television stations under

our must-carry rules, and increasing cable penetration. Is there any

evidence that the current UHF discount provides a competitive advantage

to networks that own UHF stations? While the audience reach of many

group owners are unaffected, the reach of several group owners,

including Fox and Paxson, would exceed the national reach cap were it

not for the discount. Should we decide that the discount be retained in

some form for analog television, does it make sense to retain such a

discount at all once we have transitioned to digital television

transmission? At that time, we expect broadcast television stations

will be operating on ``core'' channels, most of which are currently

allotted to UHF television.38 Finally, if the discount were

reduced or eliminated, in what manner should group owners that exceed

the new limits be grandfathered?

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\38\ See Memorandum Opinion and Order on Reconsideration of the

Sixth Report and Order in MM Docket No. 87-268, FCC 98-24 (released

February 23, 1998).

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27. Daily Newspaper/Broadcast Cross-ownership Rule. The daily

newspaper/broadcast cross-ownership rule prohibits the common ownership

of a broadcast station and a daily newspaper in the same

locale.39 The Commission adopted the rule in

1975.40 Like all of

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our multiple ownership rules, the newspaper/broadcast cross-ownership

rule rests on the twin goals of promoting diversity and economic

competition.41 The Commission determined that, as a general

rule, granting a broadcast license to an entity in the same community

as that in which the entity also publishes a newspaper would harm

diversity.42 Although the Commission, in adopting the rule,

noted its expectation that there could be meritorious waiver requests,

it set forth very stringent waiver criteria.43 As a result,

only two cases, both involving television/newspaper combinations, have

been found to warrant permanent waiver of the rule.44

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\39\ The rule provides that: No license for an AM, FM or TV

broadcast station shall be granted to any party (including all

parties under common control) if such party directly or indirectly

owns, operates or controls a daily newspaper and the grant of such

license will result in: (1) The predicted or measured 2 mV/m contour

of an AM station, computed in accordance with Sec. 73.183 or

Sec. 73.186, encompassing the entire community in which such

newspaper is published; or (2) The predicted 1 mV/m contour for an

FM station, computed in accordance with Sec. 73.313, encompassing

the entire community in which such newspaper is published; or (3)

The Grade A contour of a TV station, computed in accordance with

Sec. 73.684, encompassing the entire community in which such

newspaper is published. 47 CFR 73.3555(d).

\40\ Multiple Ownership of Standard, FM, and Television

Broadcast Stations, Second Report and Order, 50 FCC 2d 1046 (1975)

(``Second Report and Order''), recon., 53 FCC 2d 589 (1975)

(``Recon. Order''), aff'd sub nom. Federal Communications Commission

v. National Citizens Committee for Broadcasting, supra. The

provisions of 47 CFR 73.3555 do not apply to noncommercial

educational FM and TV stations. See 47 CFR 73.3555(f).

\41\ Second Report and Order, supra at 1074.

\42\ Id. at 1075.

\43\ The criteria are: 1) inability to sell the station; 2) the

only possibility of the station's sale would be at an artificially

reduced price; 3) separate ownership and operation of the newspaper

and the broadcast station could not be supported in the locality;

and 4) the purposes of the rule would be disserved by its

application or application of the rule would be unduly harsh.

\44\ Field Communications Corp., 65 FCC 2d 959 (1977); Fox

Television Stations Inc., 8 FCC Rcd 5341, 5349 (1993); aff'd sub

nom. Metropolitan Council of NAACP Branches v. FCC, 46 F.3d 1154

(D.C. Cir. 1995). In both cases, the combination had previously been

owned by the same or substantially the same parties.

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28. In 1996, the Commission opened an inquiry to consider amending

the waiver policy with respect to newspaper/radio

combinations.45 Since the scope of this biennial ownership

review encompasses the issues raised in the outstanding NOI, we will

place the comments we have already received into the record of this

review and take them into account in our review of the broader rule.

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\45\ See Notice of Inquiry in MM Docket No. 96-197, supra.

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29. Additionally, we note that a Petition for Rulemaking seeking

elimination of the rule in its entirety was filed by the Newspaper

Association of America (``NAA'') on April 28, 1997.46 We

will place this filing in the record of this proceeding and invite

comment on the merits of the petition.

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\46\ See Newspaper Association of America, Petition for

Rulemaking in the matter of amendment of section 73.3555 of the

Commission's Rules to eliminate restrictions on newspaper/broadcast

station cross-ownership (April 28, 1997) (``NAA Petition'').

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30. Generally, the NAA Petition argues that in adopting the rule

there never was a record of evidence that cross-owned stations engaged

in anti-competitive practices. NAA further argues that, whatever the

FCC's original reasons for the rule were, ``[i]n the abundantly diverse

and highly competitive mass media marketplace of the late 1990s,

maintenance of these selective cross-ownership restrictions is

unnecessary, discriminatory, and unjustifiable.'' 47 NAA

points to relaxation in other Commission ownership rules 48

and argues that the newspaper/broadcast cross-ownership rule unfairly

singles out newspaper publishers, denying them the ability to realize

efficiencies and synergies while leaving their competitors free to do

so.49 NAA also argues that relaxation of the newspaper/

broadcast cross-ownership rule will help preserve newspapers and

broadcast stations as viable media outlets and enhance diversity.

Finally, NAA asserts that the rule is inconsistent with the First

Amendment and that courts today would require a far stronger showing

than was made in 1975 to support such a direct limitation on the free

speech rights of a particular class of citizens.'' 50

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\47\ Id. at 16.

\48\ Id. at 40.

\49\ Id. at 38 et seq.

\50\ NAA Petition at 46.

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31. A number of parties, however, have argued for the continuation

of the rule. Supporters of the rule commenting in the Notice of Inquiry

on our newspaper/radio waiver policy contend that daily newspapers

often dominate the local advertising market and to give a party with

such dominance a broadcast outlet would allow it to exercise market

power with respect to the local advertising market.51

Supporters also contend that newspaper/broadcast combinations would

give a single entity too much of a voice with respect to forming

opinion on public issues. The new media pointed to by opponents of the

rule, they state, do not add significant local viewpoints, are not

locally based, and do not provide news or information on local

issues.52 Although supporters of the rule agree that cable

television and the Internet have the potential to facilitate debate on

local issues, they dispute that they yet serve that purpose to any

significant degree and argue that these media are costly and do not

reach large segments of the community.53

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\51\ See Comments of David E. Hoxeng d/b/a ADX Communications in

MM Docket No. 96-197 at 2. Hoxeng provides as an example San

Antonio, TX, where, he states, the cost-per-thousand to newspaper

advertisers skyrocketed following the buyout and closure of one San

Antonio daily by the other. Id. at 2-3. See also Comments of

Tennessee Association of Broadcasters filed in MM Docket No. 96-197

at 5.

\52\ See Joint Comments of Black Citizens for a Fair Media et

al. filed in MM Docket No. 96-197 at 18-19.

\53\ Id.

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32. We invite comment on these competing positions with respect to

the newspaper cross-ownership restriction. We specifically ask

commenters to address whether the rule should be retained, modified or

eliminated.

33. Competitive Effects on the Market for Delivered Programming.

Since newspapers do not operate in the market for delivered video or

audio programming, allowing cross-ownership between television and

newspapers in a local market would not appear to harm competition in

the market for delivered video or video programming. We invite comment

on this view.

34. Competitive Effects on the Market for Advertising. In the TV

Ownership Further Notice we tentatively considered that the local

advertising market includes video advertising (broadcast and cable),

radio advertising and newspaper advertising.54 Total local

advertising revenue for radio, television, newspaper, and cable was $68

billion in 1996. Local radio accounted for $12 billion (17.2 percent of

the total), television accounted for $21 billion (30.3 percent),

newspapers accounted for $34 billion (49.7 percent), and cable

accounted for $2 billion (2.9 percent).55 Permitting the

owner of a broadcast TV or radio station to own a newspaper, or vice

versa, could give the company the market power to raise local radio,

television, and/or newspaper advertising rates, depending on the market

share of the combined entity. We invite comment and evidence on this

issue, and on the levels of local advertising share that might give

rise to competitive concern. Commenters may also wish to comment on

NAA's views concerning competition in the advertising market. While

newspaper local advertising revenue may be as large as combined

television and radio local advertising revenues, NAA argues that it

includes newspaper classified advertisements, a market in which

broadcast stations do not compete with newspapers.

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\54\ Allowing such joint ownership should have no effect on

competition in the national advertising market because of

differences in the geographic dimensions of this market.

\55\ ''Estimated Annual U.S. Advertising Expenditures 1990--

1996,'' Prepared for Advertising Age by Robert J. Coen, McCann-

Erickson.

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35. Competitive Effects on the Program Production Market.

Newspapers, being a print medium, are not a participant in the video

and audio program production markets. Thus, relaxing this rule would

not appear to

[[Page 15359]]

harm competition in these supply markets. We invite comment on this

view.

36. Other Economic Effects. Broadcaster and newspaper interests

have long made the argument that the quality of news and public affairs

programming to the public, a core concern of the Commission, could be

enhanced if broadcasters could share in the expertise of a newspaper's

operations. We seek comment on this issue. Could the same beneficial

results be achieved through non-attributable joint ventures? Studies

documenting and comparing the news and public affairs programming of

existing newspaper/broadcast combinations with the news and public

affairs programming of broadcast facilities that are not owned by a

newspaper in the same geographic market would be particularly

informative.

37. Similar claims have been made with respect to efficiencies

realized as a result of the combination's advertising sales force.

While any realized reduction in expenses could make the joint

enterprise more economically viable than the separate operations were

before the combination took place, we are most interested in whether

such efficiencies would produce benefits for broadcast audiences and

advertisers. We seek comment on this view.

38. Effects on Diversity. The newspaper/broadcast cross-ownership

rule is intended to promote media diversity on the local level. The

maintenance of such diversity has been a central Commission objective

since its establishment. However, there have been changes since the

rule was adopted. For example, the Commission now allows some cross-

ownership between television and radio stations in the same local

market and Congress has directed us to relax our local radio ownership

limitations. In addition, there has been an increase in the number of

radio and TV stations and local newspapers. We must examine the rule in

this context, but with a full recognition of the importance of

diversity in local markets. Clearly, combined operations reduce the

number of separately owned outlets. We seek comment on the impact of

this reduction on the public interest. We also seek comment on whether

and to what extent, newspapers and broadcast stations under common

ownership express contrasting points of view or cover each other in a

critical manner.

39. In this regard, we point out that television, newspapers, and

radio continue to be America's major source of news.56 The

Roper survey found that more than two-thirds of Americans usually get

their news from television, and 37 percent from newspapers.

57 The survey indicated that Americans also rely on radio as

a news source, but to a lesser extent than television and newspapers.

We consequently wish to proceed cautiously in this area and seek

comment on how the public's reliance on these media for news would be

affected if we were to relax this rule.

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\56\ America's Watching: Public Attitudes Toward Television

1997, Roper Starch Worldwide Inc.

\57\ Respondents were permitted to name more than one news

source.

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40. The combination of a large daily newspaper and a large

broadcast station could have a significant impact on diversity. We seek

comment on whether the impact on diversity depends on the relative size

of the newspaper and broadcast facility involved in a potential merger.

Commenters should also address NAA's argument that various pay video

delivery services and other informational media, together with an

increase in broadcast stations and weekly newspapers, sufficient to

assure diversity in the absence of the rule? Or, as argued by opponents

of relaxation of the rule, are such other informational media too

limited in availability or use, or do such media provide insufficient

information on issues of local concern to offset the loss of diversity

on the local level that would accompany elimination or relaxation of

the newspaper/broadcast cross-ownership rule? We also seek comment on

how diversity is served in suburban markets where the appropriate

outlets to be examined may include metropolitan television and radio

stations and community or suburban newspapers rather than newspapers in

the major city.

41. Cable/Television Cross-ownership Rule. Section 76.501(a) of the

Commission's Rules effectively prohibits common ownership of a

broadcast television station and cable system in the same local

community.58 The Telecom Act eliminated a similar statutory

prohibition.59

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\58\ The rule prohibits a cable operator from carrying any

broadcast television station if it directly or indirectly owns,

operates, controls, or has an interest in a television broadcast

station whose predicted Grade B signal contour overlaps any part of

the area within which its cable system is serving subscribers.

\59\ See Subsection 202(i) of the Telecom Act.

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42. The rule was adopted in 1970 in order to further the

Commission's policy of promoting diversity in local mass communications

media.60 In adopting the rule, the Commission made clear

that it was avoiding any ban on joint ownership of a television

broadcast station and cable system not located in the same area. ``It

is not our desire to keep television broadcasters out of the CATV

industry, but to avoid over-concentrations of media control . . . we

should have no objection to exchange of CATV systems among broadcasters

which would maintain their involvement in the CATV industry while

eliminating local cross-ownerships.'' 61

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\60\ Amendment of Part 74, Subpart K, of the Commission's Rules

and Regulations Relative to Community Antenna Television Systems;

and Inquiry Into the Development of Communications Technology and

Services to Formulate Regulatory Policy and Rulemaking and/or

Legislative Proposals, Second Report and Order, in Docket No. 18397,

23 F.C.C. 2d 816, 820 (1970).

\61\ Id. at 821.

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43. This is the first time since adopting the cable/television

cross-ownership rule that the Commission has reviewed the rule. Indeed,

since 1984, the rule was required by statute.62 When the

Telecom Act eliminated the statutory provision, the Conference Report

clarified that repeal of the prohibition should not prejudge the

outcome of any review by the Commission of its rules regarding cable/

broadcast cross-ownership.63 The Telecom Act also eliminated

our rule prohibiting broadcast television networks from owning or

controlling cable systems.64 While broadcast television

networks are now statutorily permitted to buy cable systems, they are

still generally precluded from doing so on any significant basis by the

cable/broadcast cross-ownership rule, because the networks are also

broadcast television licensees. We seek comment on whether this rule

should be retained, modified or eliminated.

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\62\ The Cable Communications Policy Act of 1984 added section

613 of the Communications Act of 1934, as amended (47 U.S.C. 533).

Section 613(a)(1) of the Act provided that ``It shall be unlawful

for any person to be a cable operator if such person, directly or

through 1 or more affiliates, owns or controls, the licensee of a

television broadcast station and the predicted grade B contour of

such station covers any portion of the community served by such

operator's cable system.'' That provision was eliminated by section

202(i) of the Telecom Act.

\63\ House Rep. No. 458, 104th Cong., 2d Sess. at 164.

\64\ See Subsection 202(f) of the Telecom Act.

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44. Effects on the Market for Delivered Programming. Television

stations compete in the market for delivered video programming with

cable system operators, wireless cable operators and possibly with DBS

operators serving their ``local'' market. We note that in its Fourth

Annual Report on the status of competition in the market for the

delivery of multichannel video programming, the Commission stated that

``local markets for the delivery of

[[Page 15360]]

video programming generally remain highly concentrated and continue to

be characterized by some barriers to entry and expansion by potential

competitors to incumbent cable systems.'' 65 While the

ability of the broadcast spectrum to compete as a transmission medium

with cable is effectively limited by the amount of broadcast spectrum

and channels that are assigned to television markets, the Report notes

that DTV has the potential to allow the broadcasters to become more

effective competitors with cable companies in the multichannel video

programming distribution market. 66

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\65\ Fourth Annual Report, supra at para. 11. Section 628(g) of

the Communications Act of 1934, as amended, requires the Commission

to report annually to Congress on the status of competition in the

market for the delivery of video programming. Congress imposed this

annual reporting requirement as one means of obtaining information

on the competitive status of markets for the delivery of

multichannel video programming delivery that would aid both Congress

and the Commission in determining when there was competition

sufficient to reduce or eliminate many of the regulatory restraints

imposed on the cable industry.

\66\ Fourth Annual Report, supra at para. 95.

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45. We seek comment on the relevance of our conclusions in the

Fourth Annual Report on our consideration of competitors to broadcast

television. We seek comment on whether these changed market

circumstances render our rule unnecessary. Also, we seek comment on the

possible effects that repeal or relaxation of the cable/television

cross-ownership rule may have on the market for delivered programming

in particular. Would common ownership of a cable system and a

television station increase or diminish the program choices, or the

preferred programs, available to audiences? Would repeal or relaxation

raise competition concerns in this market? Could relaxation of the rule

result in public interest benefits? Could the same beneficial results

be achieved through non-attributable joint ventures? Should a

distinction be made in judging the effect of this rule on local versus

national programming?

46. Effects on the Market for Advertising. Allowing joint ownership

of a television station and a cable system in a local market might give

the joint owner the economic power to raise its advertising rates

within the local service area if, by virtue of the combination, the

local market became concentrated.67 Evidence on whether

significant market power in the local advertising market already exists

is mixed. As we stated earlier, total local advertising for these media

was $68.5 billion in 1996. Local cable advertising revenues were small

($2.0 billion, 2.9 percent of total local advertising) when compared to

local commercial broadcast television station advertising revenues

($20.7 billion, 30.3 percent of total local advertising), but they are

increasing in size and importance.68 Radio local advertising

revenues accounted for $11.7 billion (17.2 percent of total local

advertising) and newspaper accounted for $34 billion (49.7 percent of

total local advertising). Prior studies have found mixed evidence

regarding the impact of cable on broadcast TV station advertising

revenues.69 Thus, at this time, it is not clear whether

cable system operators offer effective competition to broadcast station

operators in providing local advertising.70

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\67\ Allowing such joint ownership should have no effect on

competition in the national advertising market because of

differences in the geographic dimensions of this market.

\68\ ``Estimated Annual U.S. Advertising expenditures 1990-

1996,'' Prepared for Advertising Age by Robert J. Coen, McCann-

Erickson. See also Bernstein Research, Network Television Primer,

February 1998 at 6 (showing advertising growth rates for cable

networks and television).

\69\ TV Ownership Further Notice, supra at 3571.

\70\ Id.

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47. When considering advertising substitutes, we recognize that

while many firms use a mix of video, audio, print, and other media to

advertise their products and services, some firms may rely on video

advertising almost exclusively and are, therefore, most affected by any

market power that might be created by a modification to this rule. We

have previously noted that it is not clear how substitutable radio and

newspaper local advertising is for broadcast television local

advertising.71 We seek information and data about the

appropriate scope of the product and geographic advertising market

within which television stations and cable systems compete. Statistical

evidence supporting fact-based analysis on the substitutability of

these media in the local advertising market will especially be welcome.

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\71\ Id.

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48. Effects on the Program Production Markets. We specifically seek

comment on whether the cable/broadcast television rule is no longer

necessary in light of the current state of the program production

market. The program market could be affected if Commission modification

or elimination of the cable/television cross-ownership rule permitted a

cable/television combination to exercise market power in the purchase

of video programming for delivery in the local market. We seek comment

on whether cable/broadcast television combinations could exercise

monopsony power--i.e., the ability of the cable/television combination

to artificially restrict the price paid for programming. We solicit

evidence on the potential market power in the program production market

if we were to eliminate or relax the cable/television cross-ownership

rule. Specifically, we seek comment on whether other broadcast stations

and alternative providers of delivered video programming (e.g., MMDS

and DBS) may mitigate a cable/television combination's potential for

monopsony power by providing program producers with additional local

outlets for their product. We ask commenters to address whether our

analysis of this issue is affected by whether the programming in

question is network-provided programming, syndicated programming sold

on a national basis, or programming produced for particular local

markets. We also seek comment on the potential for a cable/television

combination to deny alternative providers of delivered video

programming access to the programming of the television station

involved in the cable/television combination. On a related matter, we

seek comment on whether our channel positioning and must-carry rules

provide sufficient protection to ensure that if a cable company owns a

local television station, the cable company could not discriminate in

favor of its owned television station.

49. Other Economic Effects. Allowing cable/television cross-

ownership within a local market may permit an entity to realize

economies of scale, reducing the costs of operations. Joint ownership

may permit cost-sharing in administrative and overhead expenses,

sharing of personnel, joint advertising sales, and the pooling of

resources for local program production (such as news and public affairs

programming). The cost savings from these economies could then be used

to provide better programming to the public, better coverage of local

issues and possibly lower the cost of advertising and/or increase the

quality of service available to advertisers. We seek evidence from

commenters of the existence and magnitude of such economies and whether

they can be reached through alternatives to common ownership, e.g.,

joint ventures. In addition, we ask commenters to describe how likely

such economies are to be passed on to audiences and advertisers.

50. Effects on Diversity. Our concern with diversity is most acute

with respect to local ownership issues. Both television and competing

video outlets are viewed at the local level. We ask

[[Page 15361]]

commenters to address the impact on diversity if we were to modify or

eliminate the cable/television cross-ownership rule. Would any and all

cable/television combinations lead to greater harm to diversity than

other ownership combinations that Congress or the Commission permit?

Since cable and broadcast television may be the closest substitutes in

the video marketplace, should the Commission be especially vigilant in

promoting diversity in the context of this rule?

51. Experimental Broadcast Stations. Subpart A of part 74 of the

Commission's Rules 72 provides for the licensing of

experimental broadcast stations. These are stations ``licensed for

experimental or developmental transmissions of radio telephony,

television, facsimile, or other types of telecommunication services

intended for reception and use by the general public.'' 73 A

multiple ownership rule pertaining to experimental broadcast stations

prohibits any person (or persons under common control) from controlling

directly or indirectly two or more experimental broadcast stations

unless it can be shown that the research program requires the licensing

of two or more separate stations.74

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\72\ 47 CFR 74.101--74.184.

\73\ 47 CFR 74.101.

\74\ 47 CFR 74.134.

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52. Because this is an ownership rule pertaining to a type of

broadcast station, we believe that section 202(h) of the Telecom Act

requires the Commission to review the rule as part of its biennial

broadcast ownership review. However, experimental broadcast stations

generally are prohibited from providing regular program

service.75 Accordingly, it does not appear that they

significantly participate in competitive or diversity markets.

Nevertheless, we seek comment on whether this rule remains in the

public interest.

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\75\ 47 CFR 74.182.

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IV. Waivers

53. As we begin this first biennial review of our broadcast

ownership rules, we believe it is important to review and restate our

approach to granting conditional waivers of broadcast ownership rules

which are under active consideration by the Commission in a rulemaking

or inquiry proceeding. Generally, we have not granted conditional

waivers of a broadcast ownership rule simply on the grounds that the

rule was the subject of an ongoing rulemaking or inquiry proceeding,

believing that such a blanket approach would make our enforcement

processes unworkable and would subject our regulatees to undesirable

levels of uncertainty. Perhaps more importantly, such an approach would

necessarily assume that compliance with the subject rule during the

pendency of its review was not in the public interest, an assumption

which would ordinarily lack a substantial record basis at the notice of

inquiry or notice of proposed rulemaking stage of a proceeding.

Nonetheless, there are limited areas of our broadcast ownership waiver

practice where we have consciously departed from this general approach.

54. For example, in certain cases in recent years the Commission

has granted interim waivers or extensions where a pending proceeding is

examining the rule in question, the Commission concludes that the

application before it falls within the scope of the proposals in the

proceeding, and a grant of an interim waiver would be consistent with

the Commission's goals of competition and diversity. This is most

likely to occur where protracted rulemaking proceedings are involved

and where a substantial record exists on which to base a preliminary

inclination to relax or eliminate a rule. An example of this situation

involves the TV duopoly rule geographic market standard currently under

review in our local ownership rulemaking.76

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\76\ See Second Further Notice in MM Docket No. 91-221 & 87-7,

11 FCC Rcd 21655, 21681 (1996) (Commission states that granting

waivers satisfying the proposed standard would not adversely affect

its competition and diversity goals in the interim).

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55. In contrast to those situations, in our first biennial review

of our broadcast ownership rules, we do not believe it appropriate to

provide for conditional waiver of any of the ownership rules under

review in this proceeding solely because of the pendency of this

review. Here, for example, we do not have a protracted proceeding or

substantial record on any of these rules that leads us to initial

conclusions about any specific proposals to modify or eliminate any of

the rules at issue here. In addition, we do not have substantial waiver

experience suggesting an appropriate course of action regarding the

rules under review herein. We retain, of course, both the right and the

obligation to review any request for waiver of our rules based upon the

specific facts in a particular case. What is important is whether the

public interest would be served by a grant of the waiver.77

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\77\ See WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir.

1969).

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56. We are aware that in at least one case a conditional waiver of

the radio-newspaper cross-ownership rule has been granted based upon

the pendency of a proceeding.78 To the extent that this

decision suggests that the pendency of a proceeding by itself would be

sufficient basis for a waiver, it is superseded, although as a matter

of equity we do not alter its governance of the situation to which it

was addressed.79

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\78\ Letter to Joel Rosenbloom from Chief, Mass Media Bureau

concerning ABC/Capital Cities-Disney Company merger, dated October

24, 1996, p. 2.

\79\ We note that the staff, on March 6, 1998, granted an

extension of the Tribune Company's temporary waiver to commonly own

a television station and newspaper in the Miami, Florida market.

Stockholders of Renaissance Communications Corporation, DA 98-456

(MMB March 6, 1998). That action was based on special circumstances

and does not, in our view, stand in contradiction to the conditional

waiver standard we articulate here.

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V. Conclusion

57. By this Notice, we solicit comments on these and any other

issues pertinent to our review of our broadcast ownership and other

rules. Commenters should frame their discussion and analysis in a

manner consistent with our framework for addressing our historic

competition and diversity concerns. We ask commenters to provide data

and evidence to support their positions so as to facilitate objective

analysis of the issues raised.

Administrative Matters

58. Pursuant to applicable procedures set forth in sections 1.415

and 1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested

parties may file comments on or before May 22, 1998, and reply comments

on or before June 22, 1998. To file formally in this proceeding, you

must file an original plus six copies of all comments, reply comments,

and supporting comments. If you want each Commissioner to receive a

personal copy of your comments, you must file an original plus eleven

copies. You should send comments and reply comments to Office of the

Secretary, Federal Communications Commission, 1919 M Street, N.W.,

Washington, D.C. 20554. Comments and reply comments will be available

for public inspection during regular business hours in the FCC

Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C.

20554. Copies may be obtained through the Commission's contract copier,

International Transcription Service, Inc., 1231 20th Street, N.W.,

Washington, DC 20036. ITS can also be reached at (202)857-3800 or by

facsimile at (202)857-3805.

59. Subject to the provisions of 47 CFR 1.1203 concerning

``Sunshine

[[Page 15362]]

Period'' prohibitions, this proceeding is exempt from ex parte

restraints and disclosure requirements pursuant to 47 CFR 1.1204(b)(1).

60. Accordingly, it is ordered that pursuant to the authority

contained in sections 4, 11, 303, and 403 of the Communications Act of

1934, as amended, 47 U.S.C. 154, 161, 303, and 403, and 202(h) of the

Telecommunications Act of 1996, this Notice of Inquiry is adopted.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 98-8276 Filed 3-30-98; 8:45 am]

BILLING CODE 6712-01-P