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FCC clears 32 radio mergers

Powell working to diminish case pile-up

WASHINGTON — The FCC, working its way through a backlog, approved 32 radio mergers Monday after determining the deals warranted no further review.

It’s one of the first major moves by chairman Michael Powell, appointed by President Bush to replace Democrat William Kennard, to act more swiftly on pending matters.

Powell has stressed repeatedly the importance of speeding up FCC decisions so companies can make appropriate business plans and not face uncertainty in a changing marketplace.

“I do not believe the public interest is served by inaction,” Powell said in announcing decisions on the radio deals. “Further delay is neither warranted nor just.”

In this instance, the 32 mergers were cases that had been flagged by the commission for closer competitive analysis. In 1998, the FCC began putting aside certain radio deals to look at them more carefully because of worries over widespread consolidation in that industry.

The consolidation stemmed from a 1996 telecommunications law that eliminated a restriction on how many radio stations a company could own nationwide. The same law also eased caps on how many stations a company could own in a local market.

All the cases flagged by the FCC complied with the limits set by Congress, but agency officials felt the deals raised concerns about competition and diversity on the airwaves.

Powell questioned the commission’s authority to go beyond the law and scrutinize mergers that didn’t trigger any specific restrictions.

The agency has struggled to devise strategies for completing its review of these cases and, in the process, a backlog has built up, Powell said.

The 32 mergers cleared on Monday represent 75% of the case backlog. They cover 26 local markets. A large number of the transactions involve such major broadcasting companies as Clear Channel Communications and Cumulus Media. The agency plans to work through the rest in the weeks ahead, the chairman said.

Tristani critical

Commissioner Gloria Tristani, a Democrat, scolded the agency for using a “simplistic antitrust-like analysis” to clear the deals. The commission has authority to look at communications mergers to see whether the deals serve the public interest.

“If this continues, we will have a continued loss of diversity, a continued loss of localism which is what, after all, broadcasting is supposed to be about,” Tristani said.

Special hearings should have been convened to evaluate most of the mergers in question, she said.

Public interest groups emphasized that FCC has a function distinct from antitrust authorities and said they are worried the agency is not exercising its special role to keep the airwaves open.

Diversity threatened?

“That bodes ill for diversity of voices which cannot be measured in traditional economic terms,” said Andrew Jay Schwartzman of the Media Access Project.

He noted that because of the FCC’s approvals Monday, in some markets, two companies will split control of all local stations.

Powell said the commission currently is looking at the definition of a radio market, which can ultimately affect how many stations a company could swallow in a local area.

If that definition has led to more consolidation than desired by Congress, “We will fix that problem,” Powell said.

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