iHeartMedia 2001 Annual Report Download - page 19

19
Recent Developments and Future Actions Regarding Multiple Ownership Rules
Expansion of our broadcast operations in particular areas and nationwide will continue to be
subject to the FCC’s ownership rules and any further changes the FCC or Congress may adopt. Recent
actions by the FCC and the courts may significantly affect our business.
The 1996 Act requires the FCC to review its remaining ownership rules biennially as part of its
regulatory reform obligations to determine whether its various rules are still necessary. The first such
biennial review concluded on June 20, 2000, with the FCC’s issuance of a report retaining the 35%
national television reach limitation and the limits on the number of radio stations a company may own in
a given market. In its report, however, the FCC stated its intention to commence separate proceedings
requesting specific comment on
• possible revisions to the manner in which the FCC counts stations for purposes of the local radio
multiple ownership rule;
• the possible modification of the dual network rule to allow one of the four major national networks to
merge with one of the newer networks; and
• whether the prohibition on common ownership of a daily newspaper and a radio or TV broadcast
station in the same market should be “tailored” to cover “only those circumstances in which it is
necessary to protect the public interest.”
The FCC has concluded its separate proceeding related to the dual network rule and has modified
that rule to allow one of the four major networks to merge with one of the newer networks. It has also
commenced its proceeding with respect to the newspaper/broadcast cross-ownership rule. In January
2001, the FCC completed its 2000 biennial review, making no additional relevant changes to its
ownership rules.
Pursuant to its determination in the initial biennial review, in December 2000 the FCC solicited
public comment on a variety of possible changes in the methodology by which it defines a radio “market”
and counts stations for purposes of determining compliance with the local radio ownership restrictions.
Moreover, in the same proceeding, the FCC announced a policy of deferring, until the rulemaking is
completed, certain pending and future radio sale applications which raise “concerns” about how the FCC
counts the number of stations a company may own in a market. This deferral policy has delayed FCC
approval of our acquisitions of four radio stations in two pending transactions, and may delay additional
acquisitions for which we seek FCC approval in the near future.
In November 2001, the FCC subsumed its pending market definition/station counting rulemaking
into a larger, more comprehensive proceeding to review all aspects of the agency’s local radio multiple
ownership rules. In this proceeding the FCC has solicited comment on a wide range of issues, including,
among other things, whether it may or should modify its local radio multiple ownership rules to address
concerns of undue market concentration. The FCC has also requested comment on future regulatory
treatment of radio LMAs and radio joint sales agreements (“JSAs”). Any new or modified rules adopted
in this proceeding could limit our ability to make additional radio acquisitions in the future and could
require us to terminate radio LMAs or JSAs that we currently have in effect. Additionally, as part of this
proceeding, the FCC announced an interim policy and processing timetables with respect to pending
radio acquisitions which it has delayed under its existing policy of “flagging” certain radio acquisitions
for additional concentration review. Under this interim policy, in many cases the FCC’s staff has
requested the parties to provide additional information regarding the acquisition’s effect on competition
in the local radio market. We have been requested to provide and have submitted such information with
respect to eleven of our pending radio purchase transactions. In any one of these cases the FCC may