Proposed Final Judgment and Competitive Impact Statement; United States of America v. Chancellor Media Corporation and Whiteco Industries, Inc.

DEPARTMENT OF JUSTICE

Antitrust Division

Proposed Final Judgment and Competitive Impact Statement; United

States of America v. Chancellor Media Corporation and Whiteco

Industries, Inc.

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,

Stipulation, and Competitive Impact Statement have been filed with the

United States District Court for the District of Columbia in United

States of America v. Chancellor Media Corporation and Whiteco

Industries Inc., Case No. 1:98CV02875. The proposed Final Judgment is

subject to approval by the Court after the expiration of the statutory

60-day public comment period and compliance with the Antitrust

Procedures and Penalties Act. 15 U.S.C. 16(b)-(h).

The United States filed a civil antitrust Complaint on November 25,

1998, alleging that the proposed acquisition of Whiteco Industries Inc.

(``Whiteco'') by Chancellor Media Corporation (``Chancellor'') would

violate section 7 of the Clayton Act, 15 U.S.C. 18. The Complaint

alleges that Chancellor and Whiteco compete head-to-head to sell

outdoor bulletin advertising in seven counties: (1) Hartford County,

Connecticut; (2) Shawnee County, Kansas; (3) Leavenworth County,

Kansas; (4) Potter County, Texas; (5) Nolan County, Texas; (6)

Westmoreland County, Pennsylvania and (7) Washington County,

Pennsylvania (collectively ``the Seven Counties''). Outdoor advertising

companies sell advertising space, such as on bulletins, to local and

national customers. The outdoor bulletin advertising business in the

Seven Counties is highly concentrated. Chancellor through its

subsidiary, Martin Media, and Whiteco have a combined share of revenue

ranging from about 48 percent to 88 percent in the Seven Counties.

Unless the acquisition is blocked, competition would be substantially

lessened in the Seven Counties, and advertisers would pay higher

prices.

The prayer for relief seeks: (a) An adjudication that the proposed

transaction described in the Complaint would violate section 7 of the

Clayton Act; (b) preliminary and permanent injunctive relief preventing

the consummation of the transaction; (c) an award to the United States

of the costs of this action; and (d) such other relief as is proper.

Shortly before this suit was filed, a proposed settlement was

reached that permits Chancellor to complete its acquisition of Whiteco,

yet preserves competition in the Seven Counties where the transaction

raises significant competitive concerns. A Stipulation and proposed

Final Judgment embodying the settlement were filed at the same time the

Complaint was filed.

The proposed settlement requires Chancellor to divest bulletin

faces equal to the number of faces operated by Whiteco in:

(1) Hartford County, Connecticut;

(2) Shawnee County, Kansas;

(3) Leavenworth County, Kansas;

(4) Potter County, Texas;

(5) Nolan County, Texas; and

(6) Westmoreland and Washington Counties, Pennsylvania

Unless the plaintiff grants a time extension, Chancellor must divest

these outdoor bulletin advertising assets within six (6) months after

the filing of the Complaint in this action. Finally, in the event that

the Court does not, for any reason, enter the Final Judgment within

that six-month period, the divestitures are to occur within five (5)

business days after notice of entry of the Final Judgment.

If Chancellor does not divest the bulletin advertising assets in

the specified counties within the divestiture period, the Court, upon

plaintiff's application, is to appoint a trustee to sell the assets.

The proposed Final Judgment also requires that, until the divestitures

mandated by the Final Judgment have been accomplished, Chancellor shall

take all steps necessary to maintain and operate the bulletin

advertising assets as active competitors; maintain the management,

staffing, sales and marketing of the bulletin advertising assets; and

maintain the bulletin advertising assets in operable condition at

current capacity configurations. Further, the proposed Final Judgment

requires Chancellor to give the United States prior notice regarding

certain future outdoor bulletin advertising acquisitions or agreements

pertaining to the sale of outdoor advertising in the Seven Counties.

The plaintiff and the defendants have stipulated that the proposed

Final Judgment may be entered after compliance with the APPA. Entry of

the proposed Final Judgment would terminate this action, except that

the Court would retain jurisdiction to construe, modify, or enforce the

provisions of the proposed Final Judgment and to punish violations

thereof.

A Competitive Impact Statement filed by the United States describes

the Complaint, the proposed Final Judgment, and remedies available to

private litigants.

Public comment is invited within the statutory 60-day comment

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

the Federal Register and filed with the Court. Written comments should

be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust

Division, 1401 H Street, NW., Suite 4000, Washington, DC 20530

(telephone: 202-307-0001). Copies of the Complaint, Stipulation,

proposed Final Judgment and Competitive Impact Statement are available

for inspection in Room 215 of the Antitrust Division, Department of

Justice, 325 7th Street, NW., Washington, DC 20530 (telephone: 202-514-

2481) and at the office of the Clerk of the United States District

Court for the District of Columbia, Third Street and Constitution

Avenue, NW., Washington, DC 20001.

[[Page 2669]]

Copies of any of these materials may be obtained upon request and

payment of a copying fee.

Constance K. Robinson,

Director of Operations & Merger Enforcement, Antitrust Division.

Stipulation and Order

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

respective attorneys, as follows:

(1) The Court has jurisdiction over the subject matter of this

action and over each of the parties hereto, and venue of this action is

proper in the United States District Court for the District of

Columbia.

(2) The parties stipulate that a Final Judgment in the form hereto

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

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

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. 16), and without further notice to any party or other

proceedings, provided that plaintiff has not withdrawn its consent,

which it may do at any time before the entry of the proposed Final

Judgment by serving notice thereof on defendants and by filing that

notice with the Court.

(3) Defendants shall abide by and comply with the provisions of the

proposed Final Judgment pending entry of the Final Judgment by the

Court, or until expiration of time for all appeals of any Court ruling

declining entry of the proposed Final Judgment, and shall, from the

date of the signing of this Stipulation by the parties, comply with all

the terms and provisions of the proposed Final Judgment as though the

same were in full force and effect as an Order of the Court.

(4) Defendants shall not consummate the transaction sought to be

enjoined by the Complaint herein before the Court has signed this

stipulation and order.

(5) This Stipulation shall apply with equal force and effect to any

amended proposed Final Judgment agreed upon in writing by the parties

and submitted to the Court.

(6) In the event (a) the plaintiffs withdraws its consent, as

provided in paragraph 2 above, or (b) the proposed Final Judgment is

not entered pursuant to this Stipulation, the time has expired for all

appeals of any Court ruling declining entry of the proposed Final

Judgment, and the Court has not otherwise ordered continued compliance

with the terms and provisions of the proposed Final Judgment, then the

parties are released from all further obligations under this

Stipulation, and the making of this Stipulation shall be without

prejudice to any party in this or any other proceeding.

(7) Defendants represent that the divestitures ordered in the

proposed Final Judgment can and will be made, and that defendants will

later raise no claim of hardship or difficulty as grounds for asking

the Court to modify any of the divestiture provisions contained

therein.

Dated: November 23, 1998.

For Plaintiff United States of America:

Renee Eubanks,

U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401

H Street, NW, Suite 4000, Washington, DC 20005, (202) 307-0001.

For Defendant Chancellor Media Corporation:

Bruce Prager

Steven Sculman,

Latham and Watkins, 1001 Pennsylvania Avenue, Suite 1300, Washington,

DC 20004, (202) 637-2200.

For Defendants Whiteco Industries, Inc. and Metro Management

Associates:

Charles Biggio,

Akin, Gump, Strauss, Hauer & Feld, L.L.P. 590 Madison Avenue, 20th

Floor, New York, NY 10022, (212) 672-1000.

So ordered:

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

United States District Judge

Certificate of Service

I, Renee Eubanks, hereby certify that, on November 25, 1998, I

caused the foregoing document to be served on defendants Chancellor

Media Corporation, Whiteco Industries, and Metro Management Associates

having a copy mailed, first-class, postage prepaid, to:

Bruce J. Prager

Steven H. Schulman,

Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,

DC 20004, Counsel for Chancellor Media Corporation.

Charles Biggio,

Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, 20th

Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and

Metro Management Associates.

Final Judgment

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

Complaint in this action of November 25, 1998, and plaintiff and

defendants by their respective attorneys, having consented to the entry

of this Final Judgment without trial or adjudication of any issue of

fact or law herein, and without this Final Judgment constituting any

evidence against or an admission by any party with respect to any issue

of law or fact herein;

And whereas, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

And whereas, the essence of this Final Judgment is prompt and

certain divestiture of the outdoor advertising assets in the Seven

Counties identified below to ensure that competition is substantially

preserved;

And whereas, plaintiff requires defendants to make the divestitures

for the purpose of maintaining the current level of competition in the

sale of outdoor advertising;

And whereas, defendants have represented to the plaintiff that the

divestitures ordered herein can and will be made and that defendants

will not later raise claims of hardship or difficulty as grounds for

asking the Court to modify any of the divestitures contained below;

Now, therefore, before the taking of any testimony, and without

trial or adjudication of any issue of fact or law herein, and upon

consent of the parties hereto, it is hereby ordered, adjudged, and

decreed as follows:

I. Judisdiction

This Court has jurisdiction over each of the defendants hereto and

over the subject matter of this action. The Complaint states a claim

upon which relief may be granted against the defendants, as hereinafter

defined, under section 7 of the Clayton Act, as amended (15 U.S.C. 18).

II. Definitions

As used in this Final Judgment:

A. ``DOJ means the Antitrust Division of the United States

Department of Justice.

B. ``Chancellor'' means defendant Chancellor Media Corporation, a

Delaware corporation with its headquarters in Dallas, Texas, and its

successors, assigns, subsidiaries, divisions, groups, affiliates,

partnerships and joint ventures, and directors, officers, managers,

agents, and employees, including but not limited to Martin Media, L.P.

(``Martin''), a limited partnership with its headquarters in Dallas,

Texas.

C. ``Martin'' means Martin Media L.P., a limited partnership with

its headquarters in Dallas, Texas, and its successors, assigns,

subsidiaries, divisions, groups, affiliates, partnerships and joint

ventures, and directors, officers, managers, agents, and employees.

D. ``Whiteco'' means defendant Whiteco Industries, Inc., a Nebraska

corporation with its headquarters in Merrillville, Indiana, and its

successors, assigns, subsidiaries, divisions, groups, affiliates,

partnerships and joint

[[Page 2670]]

ventures, and directors, officers, managers, agents, and employees.

E. ``Metro'' means defendant Metro Management Associates, an

Indiana General Partership with its headquarters in Merrillville,

Indiana, and its successors, assigns, subsidiaries, divisions, groups,

affiliates, partnerships and joint ventures, and directors, officers,

managers, agents, and employees.

F. ``Defendants'' means Chancellor, Whiteco, and Metro.

G. ``Advertising Assets'' means the outdoor advertising bulletin

faces equal in number to, and having approximately the same market and

rental value as, the faces owned and operated by Whiteco or Metro, as

of the date the complaint in this action is filed, in each of these

Seven Counties: (1) Hartford County, Connecticut; (2) Shawnee County,

Kansas; (3) Leavenworth County, Kansas; (4) Potter County, Texas; (5)

Nolan County, Texas; (6) Westmoreland County, Pennsylvania; and (7)

Washington County, Pennsylvania, with the exception of the 23 bulletin

faces located on I-70, west of Exit 4 in the county, (collectively

``the Seven Counties''). This includes all tangible and intangible

assets used in the sale of outdoor advertising on those bulletin faces

in each of the Seven Counties including: All real property (owned or

leased); all licenses, permits and authorizations issued by any

governmental organization relating to the operation of the bulletin

faces; and all contracts, agreements, leases, licenses, commitments and

understandings pertaining to the sale of outdoor advertising on those

bulletin faces.

H. ``Acquirer'' or ``Acquirers'' means the entity or entities to

whom Chancellor and Whiteco divest the Advertising Assets pursuant to

this Final Judgment.

III. Applicability

A. The provisions of this Final Judgment apply to the defendants,

their successors and assigns, their 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.

B. Each defendant shall require, as a condition of the sale or

other disposition of all or substantially all of their outdoor

advertising business in any of the Seven Counties, that the Acquirer or

Acquirers agree to be bound by the provisions of this Final Judgment.

IV. Divestiture

A. Chancellor is hereby ordered and directed in accordance with the

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

the Complaint in this matter or five (5) days after notice of the entry

of this Final Judgment by the Court, whichever is later, to divest the

Advertising Assets to an Acquirer (or Acquirers) acceptable to DOJ in

its sole discretion.

B. Defendants shall use their best efforts to accomplish the

divestitures as expeditiously and timely as possible. DOJ, in its sole

discretion, may extend the time period for any divestiture for two (2)

additional thirty (30) day periods of time, not to exceed sixty (60)

calendar days in total.

C. In accomplishing the divestitures ordered by this Final

Judgment, defendants promptly shall make known, by usual and customary

means, the availability of the Advertising Assets described in this

Final Judgment. Defendants shall inform any person making an inquiry

regarding a possible purchase that the sale is being made pursuant to

this Final Judgment and provide such person with a copy of this Final

Judgment. Defendants shall also offer to furnish to all prospective

Acquirers, subject to customary confidentiality assurances, all

information regarding the Advertising 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 DOJ at the same time that such

information is made available to any other person.

D. Defendants shall permit prospective Acquirers of the Advertising

Assets to have reasonable access to personnel and to make such

inspection of the physical facilities of the Advertising Assets and any

and all financial, operational, or other documents and information

customarily provided as part of a due diligence process.

E. The defendants shall not take any action that will impede in any

way the divestiture of the Advertising Assets.

F. Divestiture of the Advertising Assets may be made to one or more

Acquirers, so long as there is only one acquirer for any particular

county's assets, and provided that in each instance it is demonstrated

to the sole satisfaction of DOJ that the Advertising Assets will remain

viable and the divestiture of such advertising assets will remedy the

competitive harm alleged in the complaint. The divestitures, whether

pursuant to Section IV or Section V of this Final Judgment:

(1) Shall be made to an Acquirer (or Acquirers) who it is

demonstrated to DOJ's sole satisfaction has or have the intent and

capability (including the necessary managerial, operational, and

financial capability) of competing effectively in the sale of

outdoor advertising; and

(2) Shall be accomplished so as to satisfy DOJ, in its sole

discretion, that none of the terms of any agreement between an

Acquirer (or Acquirers) and Chancellor or Whiteco give Chancellor or

Whiteco the ability unreasonably to raise the Acquirer's (or

Acquirers') costs, to lower the Acquirer's (or Acquirers')

efficiency, or otherwise to interfere with the ability of the

Acquirer (or Acquirers) to compete effectively.

V. Appointment of Trustee

A. In the event that defendants have not divested the Advertising

Assets within the time specified in Section IV(A) of this Final

Judgment, the Court shall appoint, on application of the United States,

a trustee selected by DOJ in its sole discretion to effect the

divestiture of the Advertising Assets.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the Advertising Assets. The

trustee shall have the power and authority to accomplish the

divestitures at the best price then obtainable upon a reasonable effort

by the trustee, subject to the provisions of Sections IV and X of this

Final Judgment, and shall have such other powers as the Court shall

deem appropriate. Subject to Section V(C) of this Final Judgment, the

trustee shall have the power and authority to hire at the cost and

expense of defendants any investment bankers, attorneys, or other

agents reasonably necessary in the judgment of the trustee to assist in

the divestitures, and such professionals and agents shall be

accountable solely to the trustee. The trustee shall have the power and

authority to accomplish the divestitures of Advertising Assets at the

earliest possible time to an Acquirer (or Acquirers) acceptable to DOJ

in its sole discretion, and shall have such other powers as this Court

shall deem appropriate. Defendants shall not object to a sale by the

trustee on any grounds other than the trustee's malfeasance. Any such

objections by defendants must be conveyed in writing to plaintiff and

the trustee within ten (10) calendar days after the trustee has

provided the notice required under Section VII of this Final Judgment.

C. The trustee shall serve at the cost and expense of defendants,

on such terms and conditions as the Court may prescribe, and shall

account for all monies derived from the sale of the

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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 money shall be paid to defendants as

appropriate according to ownership of the assets and the trust 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 divested business and based on a fee

arrangement providing the trustee with an incentive based on the price

and terms of the divestitures and the speed with which they are

accomplished.

D. Defendants shall use their best efforts to assist the trustee in

accomplishing the required divestitures, including best efforts to

effect all necessary consents and regulatory approvals. The trustee,

and any consultants, accountants, attorneys and other persons retained

by the trustee, shall have full and complete access to the personnel,

books, records, and facilities of the businesses to be divested, and

defendants shall develop financial or other information relevant to the

businesses to be divested customarily provided in a due diligence

process as the trustee may reasonably request, subject to customary

confidentiality assurances. Defendants shall permit prospective

Acquirers of the Advertising Assets to have reasonable access to

personnel and to make such inspection of physical facilities and any

and all financial, operational or other documents and other information

as may be relevant to the divestitures required by this Final Judgment.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth the trustee's efforts to

accomplish the divestitures ordered pursuant to 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 businesses to be divested,

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 the businesses to be divested.

F. If the trustee has not accomplished such divestitures within six

(6) months after its appointment, the trustee thereupon shall file

promptly with the Court a report setting forth: (1) The trustee's

efforts to accomplish the required divestitures; (2) the reasons, in

the trustee's judgment, why the required divestitures have 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

report to the parties, who shall each have the right to be heard and to

make additional recommendations consistent with the purpose of the

trust. The Court shall enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust which may,

if necessary, include extending the trust and the term of the trustee's

appointment by a period requested by DOJ.

VI. Notice

Unless such transaction is otherwise subject to the reporting and

waiting period requirements of the Hart-Scott-Rodino Antitrust

Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''),

defendants, without providing advance notification to DOJ, shall not

directly or indirectly acquire any assets of or any interest, including

any financial, security, loan, equity or management interest, in any

outdoor advertising business in any of the Seven Counties that

constitute the greater of (i) four bulletin faces, or (ii) $250,000 in

bulletin face assets in any one county during a five-year period. For

the purposes of this limitation, there shall be two consecutive five-

year periods. Acquisitions during each of these five-year periods shall

be aggregated, with the first period ending five years after the Final

Judgment is entered, and the second period beginning immediately upon

the expiration of the first five-year period.

Such notification shall be provided to the DOJ 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 through 9 of the instructions must be provided only about

outdoor advertising operations in Seven Counties. Notification shall be

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

interest, 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 DOJ

make a written request for additional information, defendants shall not

consummate the proposed transaction or agreement until twenty (20) days

after submitting all such additional information. Early termination of

the waiting periods in this paragraph may be requested and, where

appropriate, granted in the same manner as is applicable under the

requirements and provisions of the HSR Act and rules promulgated

thereunder. This Section shall be broadly construed and any ambiguity

or uncertainty regarding the filing of notice under this Section shall

be resolved in favor of filing notice.

VII. Notification

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

agreement, contingent upon compliance with the terms of this Final

Judgment, to effect, in whole or in part, any proposed divestitures

pursuant to Sections IV or V of this Final Judgment, defendants or the

trustee, whichever is then responsible for effecting the divestitures,

shall notify DOJ, of the proposed divestitures. 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 businesses to be divested that are the

subject of the binding contract, together with full details of same.

Within fifteen (15) calendar days of receipt by DOJ of notice, DOJ may

request from defendants, the proposed Acquirer (or Acquirers), or any

other third party Acquirer or Acquirers additional information

concerning the proposed divestitures and the proposed Acquirer or

Acquirers. Defendants and the trustee shall furnish any additional

information requested from them 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 DOJ has been provided the additional

information requested from defendants, the proposed Acquirer (or

Acquirers), and any third party, whichever is later, DOJ shall provide

[[Page 2672]]

written notice to defendants and the trustee, if there is one, stating

whether or not it objects to the proposed divestitures. If DOJ provides

written notice to defendants and the trustee that DOJ does not object,

then the divestitures may be consummated, subject only to defendants'

limited right to object to the sale under Section V(B) of the Final

Judgment. Absent written notice that DOJ does not object to the

proposed Acquirer (or Acquirers) or upon objection by DOJ, a

divestiture proposed under Section IV or Section V may not be

consummated. Upon objection by defendants under the provision in

Section V(B), a divestiture proposed under Section V shall not be

consummated unless approved by the Court.

VIII. Affidavits

A. Within twenty (20) calendar days of the filing of the Complaint

in this matter and every thirty (30) calendar days thereafter until the

divestitures have been completed whether pursuant to Section IV or

Section V of this Final Judgment, defendants shall deliver to DOJ an

affidavit as to the fact and manner of compliance with 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 businesses to be divested, and shall describe in detail

each contact with any such person during that period. Each such

affidavit shall also include a description of the efforts that

defendants have taken to solicit a buyer for the Advertising Assets and

to provide required information to prospective Acquirers.

B. Within twenty (20) calendar days of the filing of the Complaint

in this matter, defendants shall deliver to DOJ an affidavit that

describes in detail all actions they have taken and all steps they have

implemented on an on-going basis to preserve the Advertising Assets

pursuant to Section IX of this Final Judgment. The affidavit also shall

describe, but not be limited to, the efforts of defendants to maintain

and operate the Advertising Assets as active competitors; maintain the

management, staffing, sales, and marketing of the Advertising Assets;

and maintain the Advertising Assets in operable condition at current

capacity configurations. Defendants shall deliver to DOJ an affidavit

describing any changes to the efforts and actions outlined in their

earlier affidavit(s) filed pursuant to this Section within fifteen (15)

calendar days after the change is implemented.

C. Until one year after such divestiture has been completed,

defendants shall preserve all records of all efforts made to preserve

the business to be divested and effect the divestitures.

IX. Preservation of Assets

Until the divestitures required by the Final Judgment have been

accomplished, defendants shall take all steps necessary to maintain and

operate the Advertising Assets in Hartford County, Connecticut, and

Westmoreland and Washington Counties, Pennsylvania, as active

competitors; maintain sufficient management and staffing, maintain

sales and marketing of the Advertising Assets; and maintain the

Advertising Assets in operable condition at current capacity

configurations. In each of the remaining Counties, defendants shall

maintain and operate the Advertising Assets as active competitors, such

that the sales and marketing of the Advertising Assets shall be

conducted separate from, and in competition with, Chancellor's bulletin

faces in each of the respective counties; defendants also shall

maintain these Advertising Assets in operable condition at current

capacity configurations. Defendants shall take no action that would

jeopardize the divestitures described in this Final Judgment.

X. Financing

The defendants are ordered and directed not to finance all or any

part of any purchase by an Acquirer (or Acquirers) made pursuant to

Sections IV or V of this Final Judgment.

XI. Compliance Inspection

For 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 plaintiff, upon the

written request of the Assistant Attorney General in charge of the

Antitrust Division, and on reasonable notice to the defendants made to

their principal offices, shall be permitted:

(1) Access during office hours of the defendants to inspect and

copy all books, ledgers, accounts, correspondence, memoranda, and

other records and documents in the possession or under the control

of the defendants, who may have counsel present, relating to the

matters contained in this Final Judgment; and

(2) Subject to the reasonable convenience of the defendants and

without restraint or interference from any of them, to interview,

either informally or on the record, their officers, employees, and

agents, who may have counsel present, regarding any such matters.

B. Upon the written request of the Assistant Attorney General in

charge of the Antitrust Division, made to the defendants' principal

offices, the defendants shall submit such written reports, under oath

if requested, with respect to any matter contained in the Final

Judgment.

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

Sections VIII or XI of this Final Judgment shall be divulged by a

representative of the 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 plaintiff is a

party (including grand jury proceedings), or for the purpose of

securing compliance with this Final Judgment, or as otherwise required

by law.

D. If at the time information or documents are furnished by the

defendants to the plaintiff, the 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 the 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 the plaintiff to the defendants prior to

divulging such material in any legal proceeding (other than a grand

jury proceeding) to which the defendants are not a party.

XII. 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.

XIII. Termination

Unless this Court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the date of its entry; however,

all Whiteco and Metro obligations under the terms of this Final

Judgment cease once Whiteco and Metro irrevocably convey the

Advertising

[[Page 2673]]

Assets (owned by Whiteco and/or Metro) to be divested by Chancellor

pursuant to Section IV.

XIV. Public Interest

Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

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

United States District Judge

Certificate of Service

I, Renee Eubanks, hereby certify that, on November 25, 1998, I

caused the foregoing document to be served on defendants Chancellor

Media Corporation, Whiteco Industries, and Metro Management Associates

having a copy mailed, first-class, postage prepaid, to:

Bruce J. Prager

Steven H. Schulman,

Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,

DC 20004, Counsel for Chancellor Media Corporation.

Charles Biggio,

Akin, Gump, Strauss, Hauer & Field, L.L.P., 590 Madison Avenue, 20th

Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and

Metro Management Associates.

Competitive Impact Statement

Plaintiff, the United States of America, pursuant to section 2(b)

of the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C.

16(b)-(h), files this Competitive Impact Statement relating to the

proposed Final Judgment submitted for entry in this civil antitrust

proceeding.

I. Nature and Purpose of the Proceeding

Plaintiff filed a civil antitrust Complaint on November 25, 1998,

alleging that a proposed acquisition of Whiteco Industries, Inc. and

Metro Management Association (collectively ``Whiteco'') by Chancellor

Media Corporation (``Chancellor'') would violate section 7 of the

Clayton Act, 15 U.S.C. 18. The Complaint alleges that Chancellor and

Whiteco compete head-to-head to sell outdoor bulletin advertising in

seven counties: (1) Hartford County, Connecticut; (2) Shawnee County,

Kansas; (3) Leavenworth County, Kansas; (4) Potter Country, Texas; (5)

Nolan County, Texas; (6) Westmoreland County, Texas; and (7) Washington

County, Texas, (collectively ``the Seven Counties''). Outdoor

advertising companies sell advertising space, such as on billboards, to

local and national customers. The outdoor advertising business in the

Seven Counties is highly concentrated. Chancellor and Whiteco have a

combined share of revenue ranging from about 48 percent to a virtual

monopoly in the Seven Counties. Unless the acquisition is blocked,

competition would be substantially lessened in the Seven Counties, and

advertisers would pay higher prices.

The prayer for relief seeks: (a) An adjudication that the proposed

transaction described in the Complaint would violate section 7 of the

Clayton Act; (b) preliminary and permanent injunctive relief preventing

the consummation of the transaction; (c) an award to the United States

of the costs of this action; and (d) such other relief as is proper.

Shortly before this suit was filed, a proposed settlement was

reached that permits Chancellor to complete its acquisition of Whiteco,

yet preserves competition in the Seven Counties where the transaction

raises 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 Chancellor to divest outdoor

bulletin advertising assets equal in number to, and having

approximately the same market and rental value as, the outdoor bulletin

advertising assets operated by Whiteco in each of the Seven Counties.

In doing so, Chancellor may divest outdoor bulletin advertising assets

currently owned by either Whiteco or Chancellor. Unless the plaintiff

grants a time extension, Chancellor must divest these outdoor bulletin

advertising assets within six (6) months after the filing of the

Complaint in this action or within five (5) business days after notice

of entry of the Final Judgment, whichever is later.

If Chancellor does not divest the outdoor bulletin advertising

assets in the specified counties within the divestiture period, the

Court, upon plaintiff's application, is to appoint a trustee to sell

the assets. The proposed Final Judgment also requires that, until the

divestitures mandated by the Final Judgment have been accomplished in

Hartford, Washington and Westmoreland Counties, Chancellor, Whiteco

and/or Metro shall take all steps necessary to maintain and operate the

outdoor bulletin advertising assets as active competitors; maintain

sufficient management and staffing, and maintain sales and marketing of

the outdoor bulletin advertising assets; and maintain the outdoor

bulletin advertising assets in operable condition at current capacity

configurations. In the remaining counties, Chancellor, Whiteco and/or

Metro shall take all steps necessary to maintain and operate the

outdoor bulletin advertising assets as active competitors, such that

the sale and marketing of the assets shall be conducted separate from,

and in competition with Chancellor's bulletin faces in the respective

counties. Further, the proposed Final Judgment requires Chancellor to

give the United States prior notice regarding certain future outdoor

advertising acquisitions or agreements pertaining to the sale of

outdoor bulletin advertising in the Seven Counties.

The plaintiff and the defendants have stipulated that the proposed

Final Judgment may be entered after compliance with the APPA. Entry of

the proposed Final Judgment would terminate this action, except that

the Court would retain jurisdiction to construe, modify, or enforce the

provisions of the proposed Final Judgment and to punish violations

thereof.

II. The Alleged Violations

A. The Defendants

Chancellor, a large nationwide operator of media businesses,

including outdoor advertising, is a Delaware corporation headquartered

in Dallas, Texas. Chancellor conducts some outdoor advertising business

through its subsidiary, Martin Media, L.P. (``Martin''), a limited

partnership headquartered in Dallas, Texas. Martin sells outdoor

advertising in many states throughout the United States, including in

each of the Seven Counties. In 1997 Chancellor's total revenues from

outdoor advertising were approximately $78 million.

Whiteco is a Nebraska corporation headquartered in Merrillville,

Indiana. Whiteco sells outdoor advertising in 32 states, including in

each of the Seven Counties. In 1997, its revenues from outdoor

advertising were approximately $6.9 million.

B. Description of the Events Giving Rise to the Alleged Violations

On August 30, 1998, Chancellor entered into an Asset Purchase

Agreement with Whiteco. Chancellor agreed to purchase certain assets of

Whiteco used or useful in the outdoor advertising business of Whiteco

in the United States. The transaction is valued at approximately $930

million.

Chancellor and Whiteco compete for the business of advertisers

seeking to obtain outdoor advertising space in the Seven Counties. The

proposed acquisition of Whiteco by Chancellor would eliminate that

competition in violation of Section 7 of the Clayton Act.

[[Page 2674]]

C. Anticompetitive Consequences of the Proposed Transaction

The Complaint alleges that the sale of outdoor advertising in the

Seven Counties constitutes a relevant product market and a line of

commerce, and that each county constitutes a relevant geographic market

and section of the country for antitrust purposes.

Advertisers select outdoor advertising based upon a number of

factors including, inter alia, the size of the target audience

(individuals most likely to purchase the advertiser's products or

services), the traffic patterns of the audience, and other audience

characteristics. Many advertisers seek to reach a large percentage of

their target audience by selecting outdoor advertising on highways and

roads where vehicle traffic is high, so that the advertising will be

frequently viewed by the target audience, or where the vehicle traffic

is close to the advertiser's location. When different firms own outdoor

advertising spaces that can efficiently reach that target audience,

advertisers benefit from the competition among outdoor advertising

providers, who offer better prices or services. Many local and/or

national advertisers purchase outdoor advertising because outdoor

advertising space is less expensive and more cost-efficient than other

media at reaching the advertiser's target audience with the type of

advertising message that the advertiser prefers to deliver.

Outdoor advertising has prices and characteristics that are

distinct from other advertising media. An advertiser's evaluation of

the importance of these characteristics depends on the type of

advertising message the advertiser wishes to convey and the price the

advertiser is willing to pay to deliver that message. Many advertisers

who use outdoor advertising also advertise in other media, including

radio, television, newspapers and magazines, but use outdoor

advertising when they want a large number of exposures to consumers at

a low cost per exposure. Because each exposure is brief, outdoor

advertising is most suitable for highly visual, limited information

advertising.

For many advertising customers, outdoor advertising's particular

combination of characteristics makes it an advertising medium for which

there are no close substitutes. Such customers who want or need to use

outdoor advertising would not switch to another advertising medium if

outdoor advertising prices increased by a small but significant amount.

Although some local and national advertisers may switch some of their

advertising to other media, rather than absorb a price increase in

outdoor advertising space, the existence of such advertisers would not

prevent outdoor advertising companies in the Seven Counties from

profitably raising their prices a small but significant amount. At a

minimum, outdoor advertising companies could profitably raise prices to

those advertisers who view outdoor advertising as a necessary

advertising medium for them, or as a necessary advertising complement

to other media. Outdoor advertising companies negotiate prices

individually with advertisers. During individual price negotiations

between advertisers and outdoor advertising companies, advertisers

provide the outdoor advertising companies with information about their

advertising needs, including their target audience and the desired

exposure. Outdoor advertising companies thus have the ability to charge

advertisers differing rates based in part on the number and

attractiveness of competitive outdoor advertising companies that can

meet a particular advertiser's specific target needs. Because of this

ability to price discriminate among customers, outdoor advertising

companies may charge higher prices to advertisers that view outdoor

advertising as particularly effective for their needs, while

maintaining lower prices for other advertisers.

The Complaint alleges that Chancellor's proposed acquisition of

Whiteco would lessen competition substantially in the sale of outdoor

advertising in each of the Seven Counties. The proposed transaction

would create further market concentration in already highly

concentrated markets, and Chancellor would control a substantial share

of the outdoor advertising revenues in these markets. Using a measure

of market concentration called the Herfindahl-Hirschman Index

(``HHI''), explained in Appendix A annexed hereto, post acquisition:

a. In Hartford County, Connecticut, Chancellor's share of the

outdoor advertising market, based on advertising revenues, would

increase to 100 percent. The approximately post-merger HHI would be

10000, representing an increase of about 4992.

b. In Shawnee County, Kansas, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 48 percent. The approximate post-market HHI would be 5008,

representing an increase of about 1144.

c. In Leavenworth County, Kansas, Chancellor's share of the

outdoor advertising market, based on advertising revenues, would

increase to about 60 percent. The approximate post-merger HHI would

be 4130, representing an increase of about 832.

d. In Potter County, Texas, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 82 percent. The approximate post-merger HHI would be 6959,

representing an increase of about 1050.

e. In Nolan County, Texas, Chancellor's share of the outdoor

advertising market, based on advertising revenues, would increase to

about 76 percent. The approximate post-merger HHI would be 6049,

representing an increase of about 1920.

f. In Westmoreland County, Pennsylvania, Chancellor's share of

the outdoor advertising market, based on advertising revenues, would

increase to about 71 percent. The approximate post-merger HHI would

be 5454 representing an increase of about 2516.

g. In Washington County, Pennsylvania, Chancellor's share of the

outdoor advertising market, based on advertising revenues, would

increase to about 88 percent. The approximate post-merger HHI would

be 8888 representing an increase of about 1560.

In each of the Seven Counties, Chancellor and Whiteco compete head-

to-head and, for many local and/or national advertisers buying space,

they are close substitutes for each other. During individual price

negotiations, advertisers that desire to reach a certain audience can

help ensure competitive prices by ``playing off'' Whiteco against

Chancellor. Chancellor's acquisition of Whiteco will end this

competition. After the acquisition, such advertisers will be unable to

reach their desired audiences with equivalent efficiency without using

Chancellor's outdoor advertising. Because advertisers seeking to reach

these audiences would have inferior alternatives to the merged entity

as a result of the acquisition, the acquisition would give Chancellor

the ability to raise prices and reduce the quality of its service to

some of its advertisers in each of the Seven Counties.

New entry into the advertising market in response to a small but

significant price increase by the merged parties in any of these

markets is unlikely to be timely and sufficient to render the price

increase unprofitable.

For all of these reasons, plaintiff concludes that the proposed

transaction would lessen competition substantially in the sale of

outdoor advertising in the Seven Counties, eliminate actual and

potential competition between Chancellor and Whiteco, and result in

increased prices and/or reduced quality of services of outdoor

advertisers in each of the Seven Counties, all in violation of section

7 of the Clayton Act.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment would preserve existing competition in

the sale

[[Page 2675]]

of outdoor advertising space in Seven Counties. It requires the

divestiture of bulletin faces equal in number to, and having

approximately the same market and rental value as, the number of faces

operated by Whiteco in the Seven Counties. Exempt from the divestiture

are the 23 bulletin faces located on I-70 west of Exit 4 in Washington

County, Pennsylvania. This relief maintains the level of competition

that existed premerger and ensures that the affected markets will

suffer no reduction in competition as a result of the merger.

Advertisers will continue to have alternatives to the merged firm in

purchasing outdoor advertising. Finally, the ownership structure is

maintained in that the number of competitors who may compete for

advertisers' business will remain unchanged.

Unless plaintiff grants an extension of time, the divestitures must

be completed within six (6) months after the filing of the Complaint in

this matter or within five (5) business days after notice of entry of

this Final Judgment by the Court, whichever is later. Until the

divestitures take place in Hartford, Washington and Westmoreland

Counties, defendants must maintain and operate the advertising assets

as active competitors; maintain sufficient management and staffing,

maintain sales and marketing of the advertising assets; and maintain

the advertising assets in operable condition at current capacity

configurations. In the remaining counties, defendants must maintain and

operate the advertising assets as active competitors; such that the

sales marketing of the assets is conducted separate from, and in

competition with the Chancellor's bulletin faces in the respective

counties.

The divestitures must be to a purchaser or purchasers acceptable to

the plaintiff in its sole discretion. Unless plaintiff otherwise

consents in writing, the divestitures shall include all the assets of

the outdoor advertising business being divested, and shall be

accomplished in such a way as to satisfy plaintiff, in its sole

discretion, that such assets can and will be used as viable, ongoing

commercial outdoor advertising businesses. In addition, the purchaser

or purchasers must intend in good faith to continue the operations of

the outdoor advertising businesses as were in effect in the period

immediately prior to the filing of the Complaint, unless any

significant change in the operations planned by a purchaser is accepted

by the plaintiff in its sole discretion. This provision is intended to

ensure that the outdoor advertising businesses to be divested remain

competitive with Chancellor's other outdoor advertising businesses in

the Seven Counties.

If defendants fail to divest these outdoor advertising assets

within the time periods specified in the Final Judgment, the Court,

upon plaintiff's application, is to appoint a trustee nominated by

plaintiff to effect the divestitures. If a trustee is appointed, the

proposed Final Judgment provides that defendants will pay all costs and

expenses of the trustee and any professionals and agents retained by

the trustee. The compensation paid to the trustee and any persons

retained by the trustee shall be both reasonable in light of the value

of the advertising assets, and based on a fee arrangement providing the

trustee with an incentive based on the price and terms of the

divestitures and the speed with which they are accomplished. After

appointment, the trustee will file monthly reports with the plaintiff,

defendants and the Court, setting forth the trustee's efforts to

accomplish the divestitures ordered under the proposed Final Judgment.

If the trustee has not accomplished the divestitures 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 divestitures, (2) the reasons, in the trustee's judgment,

why the required divestitures have not been accomplished and (3) the

trustee's recommendations. At the same time the trustee will furnish

such report to the plaintiff and defendants, who will each have the

right to be heard and to make additional recommendations.

The proposed Final Judgment contains provisions to ensure that

these outdoor advertising assets will be preserved, so that the

advertising assets remain viable competitors after divestiture.

The proposed Final Judgment requires Chancellor to provide at least

thirty (30) days' notice to the Department of Justice before acquiring

more than a de minimis interest in any assets of, or any interest in,

another outdoor advertising company in the Seven Counties. Such

acquisitions could raise competitive concerns but might be too small to

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

notification statute. Moreover, Chancellor may not agree to sell

outdoor advertising space for any other outdoor advertising company in

the Seven Counties without providing plaintiff with notice. Thus, this

provision in the proposed Final Judgment ensures that the Department

will receive notice of and be able to act, if appropriate, to stop any

agreements that might have anticompetitive effects in the Seven

Counties.

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

likely anticompetitive effects of Chancellor's proposed transaction

with Whiteco in the Seven Counties. Nothing in this Final Judgment is

intended to limit the plaintiff's ability to investigate or to bring

actions, where appropriate, challenging other past or future activities

of defendants in the Seven Counties.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

attorneys' fees. Entry of the proposed Final Judgment will neither

impair nor assist the bringing of any private antitrust damage action.

Under the provisions of section 5(a) of the Clayton Act, 15 U.S.C.

16(a), the proposed Final Judgment has no prima facie effect in any

subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

The plaintiff and the defendants have stipulated that the proposed

Final Judgment may be entered by the Court after compliance with the

provisions of the APPA, provided that the plaintiff has not withdrawn

its consent. The APPA conditions entry upon the Court's determination

that the proposed Final Judgment is in the public interest.

The APPA provides a period of at least sixty (60) days preceding

the effective date of the proposed Final Judgment within which any

person may submit to the plaintiff written comments regarding the

proposed Final Judgment. Any person who wishes to comment should do so

within sixty (60) days of the date of publication of this Competitive

Impact Statement in the Federal Register. The plaintiff will evaluate

and respond to the comments. All comments will be given due

consideration by the Department of Justice, which remains free to

withdraw its consent to the proposed Final Judgment at any time prior

to entry. The comments and the response of the plaintiff will be filed

with the Court and published in the Federal Register.

Written comments should be submitted to: Craig W. Conrath, Chief,

Merger Task Force, Antitrust Division, United States Department of

Justice,

[[Page 2676]]

1401 H Street, NW; Suite 4000, Washington, DC 20530.

The proposed Final Judgment provides that the Court retains

jurisdiction over this action, and that the parties may apply to the

Court for any order necessary or appropriate for the modification,

interpretation or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

Plaintiff considered, as an alternative to the proposed Final

Judgment, a full trial on the merits of its Complaint against

defendants. Plaintiff is satisfied, however, that the divestiture and

other relief contained in the proposed Final Judgment will preserve

viable competition in the sale of outdoor advertising space in the

Seven Counties. 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. 16(e).

As the United States Court of Appeals for the D.C. Circuit 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.'' \1\ Rather,

\1\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette

Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''

determination can be made properly on the basis of the Competitive

Impact Statement and Response to Comments filed pursuant to the

APPA. Although the APPA authorizes the use of additional procedures,

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

not invoke any of them unless it believes that the comments have

raised significant issues and that further proceedings would aid the

court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong.

2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.

[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. 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. \2\

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

\2\ 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.' '' \3\

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

\3\ 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, 406 F. Supp. at 716

(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F.

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

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

The relief obtained in this case is strong and effective relief

that should fully address the competitive harm posed by the proposed

transaction.

VIII. Determinative Documents

There are no determinative materials or documents within the

meaning of the APPA that were considered by the plaintiff in

formulating the proposed Final Judgment.

Dated: December 16, 1998.

Respectfully submitted,

Renee Eubanks,

Merger Task Force, U.S. Department of Justice, Antitrust Division, 1401

H Street, NW; Suite 4000, Washington, DC 20530, (202) 307-0001.

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 points are

considered to be moderately concentrated, and those in which the HHI

is in excess of 1800 points are considered to be concentrated.

Transactions that increase the HHI by more than 100 points in

concentrated markets presumptively raise antitrust concerns under

the Merger Guidelines. See Merger Guidelines Sec. 1.51.

Certificate of Service

I, Renee Eubanks hereby certify that, on December 16, 1998, I

caused the foregoing document to be served on defendants Whiteco

Industries, Inc, Metro Management Associates, and

[[Page 2677]]

Chancellor Media Corporation by having a copy mailed, first-class,

postage prepaid, to:

Steven H. Schulman,

Bruce J. Prager,

Latham & Watkins, 1001 Pennsylvania Ave., NW, Suite 1300, Washington,

DC 20004, Counsel for Chancellor Media Corporation.

Charles Biggio,

Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, 20th

Floor, New York, NY 10022, Counsel for Whiteco Industries, Inc. and

Metro Management Associates.

[FR Doc. 99-826 Filed 1-14-99; 8:45 am]

BILLING CODE 4410-11-M