BROADCASTING

SUMMARY OF REVISION OF BROADCAST OWNERSHIP RULES

On September 4, 1992, the FCC revised its radio broadcast ownership rules and policies. The rules adopted in the Report and Order relaxed the national ownership caps to allow a single licensee to own up to 30 AM and 30 FM stations nationwide. The previous limit had been 12 AM and 12 FM stations overall, with ownership in up to two more stations in each service, providing that those stations were minority controlled. The national ownership rules were further amended to permit a single entity to hold an attributable interest in up to 18 AM and 18 FM stations. This Report and Order would automatically increase national ownership limits to 20 AM and 20 FM stations in two years, and permit an entity to hold a non-controlling attributable interest in an additional three stations in each service if the stations are controlled by minorities or small businesses.

On Thursday, October 20, 1994 the Commission affirmed its 20/20 limit and increased the number of minority controlled or small business-controlled stations in which a non-minority broadcaster may hold non-controlling but attributable interest from three to five stations above the 20/20 limit.

Does the increase in the nat'l ownership limits threaten competition, viewpoint diversity or help to resolve the financial problems of the broadcasting industry?

Given the dramatic increase in the number of radio stations and the growth of competing media in recent years, the Commission remains convinced that the likelihood of a single firm or group of firms exercising dominance or undue control over the radio stations at the national level is extremely remote. Several petitioners argue that the higher national ownership limits will work against independent and minority broadcasters because they will be unable to compete with large groups. Some petitioners contend that because minority owned stations tend to be low-rated and unprofitable, the new limits will drive minorities out of broadcast ownership and preclude new minority owners from entering the industry.

The Commission also maintains that given the significant increase in the overall number of stations, increase in the national caps pose no threat to viewpoint diversity. However, several petitioners disagree.

The commission predicted that this expansion in national limits would strengthen existing stations by allowing them to achieve economies scale through combining administrative, sales, programming, promotion, production or other functions. Petitioners argue that the Commission's decision was based on "incomplete and often self-serving industry sponsored figures which overstate recession related short-term losses and obscure the fundamental health of industry."