Order Code RL34416
The FCC’s Broadcast Media Ownership Rules
March 17, 2008
Charles B. Goldfarb
Specialist in Telecommunications Policy
Resources, Science, and Industry Division

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The FCC’s Broadcast Media Ownership Rules
Summary
The Federal Communications Commission’s (FCC or Commission) broadcast
media ownership rules are intended to foster the three long-standing goals of U.S.
media policy — competition, localism, and diversity of voices. The FCC has the
statutory obligation to review these rules every four years to determine if they
continue to serve the public interest or should be modified or eliminated. In
December 2007, the FCC adopted an order that modified only one of its broadcast
media ownership rules — the newspaper-broadcast cross-ownership rule — and left
the other rules intact.
Under the new rule, it would be presumptively “not inconsistent with” the
public interest, in the 20 largest local markets, for an entity to own both a major daily
newspaper and a single television or radio station, so long as the television station is
not among the four highest-rated stations in the market and after the transaction there
are at least eight independently owned and operating major media voices. Otherwise,
in most situations newspaper-broadcast cross-ownership in a local market would be
presumptively inconsistent with the public interest. Each proposed combination,
however, would be reviewed on a case-by-case basis, and proposed combinations in
smaller markets could be approved. Fifteen parties have appealed the new rule; the
challenges will be heard by the United States Court of Appeals for the Ninth Circuit.
A joint resolution of disapproval to revoke the new rule has been introduced in both
the Senate (S.J.Res. 28) and the House (H.J.Res. 79). In addition, S. 2332 and H.R.
4835 would negate the rule because they would require the FCC, before adopting any
new broadcast ownership rule after October 1, 2007, to give 90 days’ notice for
public comment, which was not done prior to adoption of the rule. In contrast, H.R.
4167 would eliminate the newspaper-radio (but not newspaper-television) cross-
ownership prohibition in its entirety.
In its previous quadrennial review, in June 2003, the FCC modified five of its
broadcast media ownership rules, easing restrictions on the ownership of multiple
television stations (nationally and in local markets) and on local media cross-
ownership, and tightening restrictions on the ownership of multiple radio stations in
local markets. Those rules have never gone into effect. Sec. 629 of the FY2004
Consolidated Appropriations Act (P.L. 108-199) instructed the FCC to modify its
new National Television Ownership rule to allow a broadcast network to own and
operate local broadcast stations that reach, in total, at most 39% of U.S. television
households. In June 2004, the United States Court of Appeal for the Third Circuit,
in Prometheus Radio Project vs. Federal Communications Commission, found that
the FCC did not provide reasoned analysis to support its specific local ownership
limits, and also that the FCC failed to address the impact of it new rules on minority
ownership of broadcast stations, and therefore remanded portions of the new local
ownership rules back to the FCC and extended its stay of those rules. This report
will be updated as warranted. For a detailed discussion of the historical development
of the FCC’s broadcast media ownership rules, and especially of FCC actions during
the 2003-2007 period, see CRS Report RL31925, FCC Media Ownership Rules:
Current Status and Issues for Congress, by Charles B. Goldfarb.

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Contents
Current Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Newspaper-Broadcast Cross-Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The specifics of the newly adopted rule . . . . . . . . . . . . . . . . . . . . . . . . . 3
The FCC’s justification of the numerical limits in the rule . . . . . . . . . . 6
Challenges to the new rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Television-Radio Cross-Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Local Television Multiple Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Local Radio Multiple Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
National Television Ownership (% Cap) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Dual Network Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Impact of the Broadcast Media Ownership Rules
on Minority Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Underlying Issues: Standard of Review, Bright Line Tests,
Case-by-Case Evaluations, and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Standard of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Bright Line Tests, Case-by-Case Evaluations, and Waivers . . . . . . . . . . . . 19

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The FCC’s
Broadcast Media Ownership Rules
Current Status1
The Federal Communications Commission’s (FCC or Commission) broadcast
media ownership rules are intended to foster the three long-standing goals of U.S.
media policy — competition, localism, and diversity of voices. The FCC is required
by statute to review these rules every four years to determine if they continue to serve
the public interest or should be modified or eliminated.2 In addition, in 2004 the
FCC was instructed by the United States Court of Appeals for the Third Circuit
(Third Circuit) “to justify or modify” the broadcast local ownership rules that it had
adopted in 2003 as part of its statutory periodic review.3 The Third Circuit found that
the Commission had not provided reasoned analysis to support the specific
ownership limits in those rules:
The Commission’s derivation of new Cross-Media Limits, and its modification
of the numerical limits on both television and radio station ownership in local
markets, all have the same essential flaw: an unjustified assumption that media
1 For a detailed discussion of the historical development of the FCC’s broadcast media
ownership rules, and especially of FCC actions during the 2003-2007 period, see CRS
Report RL31925, FCC Media Ownership Rules, Current Status and Issues for Congress,
by Charles B. Goldfarb.
2 Section 629 of the FY2004 Consolidated Appropriations Act, P.L. 108-199, modified
Section 202(h) of the Telecommunications Act of 1996 (P.L. 104-104), instructing the FCC
to perform a quadrennial review of all of its media ownership rules, except the National
Television Ownership rule.
3 Prometheus Radio Project v. Federal Communications Commission, 373 F.3d 372, 435
(3rd Circuit 2004) (Prometheus). The decision is available at [http://www.ca3.uscourts.gov/
opinarch/033388p.pdf], viewed on March 6, 2008. For a legal perspective on the
Prometheus decision, see CRS Report RL32460, Legal Challenge to the FCC’s Media
Ownership Rules: An Overview of Prometheus Radio v. FCC, by Kathleen Ann Ruane.
Although the Third Circuit remanded the FCC’s specific cross-media ownership, local
television multiple ownership, and local radio multiple ownership rules, and extended the
stay, it upheld many of the FCC’s findings, including: not to retain a ban on newspaper-
broadcast cross-ownership; to retain some limits on common ownership of different-type
media outlets; to retain the restriction on owning more than one top-four television station
in a market; the Commission’s new definition of local radio markets; to include non-
commercial stations in determining the size of local radio markets; the Commission’s
restriction on the transfer of radio stations; to count radio stations brokered under a Joint
Sales Agreement toward the brokering station’s permissible ownership totals; and to use
numerical limits in its ownership rules (though not the specific numerical limits adopted by
the Commission).

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CRS-2
outlets of the same type make an equal contribution to diversity and competition
in local markets. We thus remand for the Commission to justify or modify its
approach to setting numerical limits.4
As a result of the Third Circuit’s stay and remand of the broadcast local
ownership rules that the FCC had adopted in 2003,5 the broadcast media ownership
rules that had been in place prior to the FCC’s adoption of its Order on June 2, 2003
were reinstated — except that in the interim Congress passed Section 629 of the
FY2004 Consolidated Appropriations Act (P.L. 108-199), which instructed the FCC
to modify its National Television Ownership rule.
Responding to these statutory and judicial instructions, in December 2007 the
FCC adopted an order that modified its newspaper-broadcast cross-ownership rule,
but left its other broadcast local ownership rules intact.6 Two commissioners
dissented from the order.7
4 The decision went on to state: “The stay currently in effect will continue pending our
review of the Commission’s action on remand, over which this panel retains jurisdiction.”
However, when 15 parties filed appeals of the rule in a number of different federal circuit
courts of appeal, the United States Court of Appeals for the Ninth Circuit (Ninth Circuit)
was chosen at random from among the courts where appeals were filed to hear the
challenges. See “Mass Media Notes,” Communications Daily, March 11, 2008.
5 The rules adopted by the FCC in its 2003 Order can be found in In the Matter of 2002
Biennial Regulatory Review — Review of the Commission’s Broadcast Ownership Rules and
Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996;
Cross-Ownership of Broadcast Stations and Newspapers; Rules and Policies Concerning
Multiple Ownership of Radio Broadcast Stations in Local Markets; Definition of Radio
Markets; Definition of Radio Markets for Areas Not Located in an Arbitron Survey Area,
MB Docket Nos. 02-277 and 03-130 and MM Docket Nos. 01-235, 01-317, and 00-244,
Report and Order and Notice of Proposed Rulemaking (2003 Order), adopted June 2, 2003
and released July 2, 2003.
6 In the Matter of 2006 Quadrennial Regulatory Review — Review of the Commission’s
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996; 2002 Biennial Regulatory Review — Review of the
Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section
202 of the Telecommunications Act of 1996; Cross-Ownership of Broadcast Stations and
Newspapers; Rules and Policies Concerning Multiple Ownership of Radio Broadcast
Stations in Local Markets; Definition of Radio Markets; Ways to Further Section 257
Mandate and to Build on Earlier Studies; Public Interest Obligations of TV Broadcast
Licensees, MB Docket Nos. 06-21, 02-277, and 04-228, and MM Docket Nos. 01-235, 01-
317, 00-244, and 99-360, Report and Order and Order on Reconsideration (2007 Order),
adopted December 18, 2007, and released February 4, 2008, available at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-216A1.pdf], viewed on March
6, 2008. The specific language of the rule changes is presented in Appendix A of the 2007
Order.
7 See “Statement of Commissioner Michael J. Copps, Dissenting,” December 18, 2007,
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278932A3.pdf],
viewed on March 6, 2008, and “Statement of Commissioner Jonathan S. Adelstein,
Dissenting,” December 18, 2007, available at [http://hraunfoss.fcc.gov/edocs_public/
attachmatch/DOC-278932A4.pdf], viewed on March 6, 2008.

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CRS-3
Given these congressional, regulatory, and judicial actions, the current status of
the FCC’s broadcast media ownership rules is as follows.
Newspaper-Broadcast Cross-Ownership
The specifics of the newly adopted rule. On December 18, 2007, the FCC
adopted an order that modified the newspaper-broadcast cross-ownership rule.8 The
new rule, which cannot go into effect until it has been approved by the courts,9 would
replace the current rule that prohibits cross-ownership of a newspaper and a
television or radio station in a local market. A number of such combinations
currently exist, however, because when the FCC first adopted the cross-ownership
prohibition in 1975 it grandfathered some pre-existing combinations and, in the past
few years, the FCC has granted a number of newspaper-broadcast combinations
temporary waivers, pending conclusion of its quadrennial review proceeding. In its
2007 Order, the FCC granted permanent waivers to five of those newspaper-
broadcast station combinations.10
The new newspaper-broadcast cross-ownership rule is complex. Every
proposed newspaper-broadcast combination in which the signal of the broadcast
station encompasses the entire community in which the newspaper is published is
subject to a public interest determination with three distinct steps.11
First, the new rule establishes a bright line test, with strict numerical limits, to
identify proposed combinations that would be deemed presumptively “not
inconsistent with the public interest.”12 Specifically, it would be presumptively not
inconsistent with the public interest for an entity to own both a major daily
newspaper and a single television or radio station in a single local market if:
! the combination is in one of the 20 largest local markets;13 and,
8 2007 Order, at paras. 13-79 and Appendix A, pp. 84-85..
9 As explained in fn. 4 above, the Third Circuit, in its Prometheus decision, stated that it
retained jurisdiction to review the FCC’s action on remand, but when 15 parties filed
appeals in a number of different circuit courts of appeal, the Ninth Circuit was chosen at
random to hear the challenges.
10 Ibid., at para. 77.
11 Ibid., at Appendix A, p. 84, amending 47 C.F.R. 73.3555(d).
12 Ibid., at Appendix A, pp. 84-85, amending 47 C.F.R. 73.3555(d)(3).
13 Local markets are referred to as designated market areas or DMAs. DMAs are
geographic designations developed by Nielsen Media Research. A DMA is made up of all
the counties that get the preponderance of their broadcast programming from a given
television market. The Nielsen DMAs are both complete (all counties in the United States
are in a DMA) and exclusive (DMAs do not overlap). In the 1992 Cable Act, Congress
amended the 1934 Communications Act to require, subject to certain exceptions, each cable
system to carry the signals of all the local full power commercial television stations “within
the same television market as the cable system,” with that market determined by
“commercial publications which delineate television markets based on viewing patterns.”
(continued...)

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CRS-4
! if the broadcast station is a television station, the station is not
among the four highest-rated stations in the market; and,
! after the transaction there still are at least eight independently owned
and operating major media voices in the market.14
These three bright line numerical limits are straight-forward and easy to objectively
identify.
All other proposed newspaper-broadcast station combinations in a local market
would be deemed presumptively inconsistent with the public interest.15
Second, the new rule specifies two circumstances that, if met, would
automatically reverse a negative presumption about a proposed combination.16
Specifically, the negative presumption would be automatically reversed if either:
! the newspaper or broadcast station has failed or is failing;17 or
! the proposed combination is with a broadcast station that was not
offering local newscasts prior to the combination, and the station
would initiate at least seven hours per week of local news
programming after the combination.18
These circumstances are relatively straight-forward and relatively easy to objectively
identify. Although the second circumstance cannot be demonstrated in advance of
13 (...continued)
47 U.S.C. § 534. The DMAs represent the only nationwide commercial mapping of
television audience viewing patterns. Each county in the United States is assigned to a
television market based on the viewing habits of the residents in the county.
14 The rule defines major media voices as full-power commercial and noncommercial
television stations and major newspapers, where the latter are those newspapers that are
published at least four days a week within the DMA and have a circulation exceeding 5%
of the households in the DMA. See 2007 Order, at Appendix A, p. 85, amending 47 C.F.R.
73.3555(d)(3)(ii).
15 2007 Order, at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(4).
16 Ibid., at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(7).
17 In order to qualify as failed, the newspaper or broadcast outlet has to have stopped
circulation or have been dark for at least four months immediately prior to the filing of the
assignment or transfer application, or must be involved in court-supervised involuntary
bankruptcy or involuntary insolvency proceedings. To qualify as failing, the applicant must
show that (a) the broadcast station has had an all-day audience share of 4% or lower; (b) the
newspaper or broadcast station has had a negative cash flow for the previous three years;
(c) the combination will produce public interest benefits; and (d) the in-market buyer is the
only reasonably available candidate willing and able to acquire and operate the newspaper
or station. See 2007 Order, at para. 65.
18 2007 Order, at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(7)(ii).

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CRS-5
the combination, the 2007 Order states that “broadcast station licenses that are
approved as a result of this reversal presumption will need to report to the
Commission annually regarding how they have followed through on their
commitment to initiate at least seven hours a week of local news.”19 The 2007 Order
does not identify, however, a process to use if the commitment is not met.
Third, the new rule identifies four factors that would be considered to confirm
or rebut the positive or negative public interest presumption about a proposed
combination, to yield a final public interest determination.20 Specifically, for any
proposed newspaper-broadcast station combination in a local market — whether it
met the criteria for a positive or negative public interest presumption — the FCC
would be required to make a public interest determination considering the following
four factors:
! whether the combined entity will significantly increase the amount
of local news in the market;21
! whether the newspaper and the broadcast outlets each will continue
to employ its own staff and each will exercise its own independent
news judgment;
! the level of concentration in the DMA; and
! the financial condition of the newspaper or broadcast station, and if
the newspaper or broadcast is in financial distress, the proposed
owner’s commitment to invest significantly in newsroom operations.
Where this public interest determination is being made for a proposed combination
that has a negative presumption, “the applicant must show by clear and convincing
evidence that the co-owned major newspaper and station will increase the diversity
of independent news outlets and increase competition among independent news
sources in the market,” with the four factors listed above informing this decision.”22
The discussion in the 2007 Order identifies these as factors to be used to rebut
a negative presumption,23 but does not indicate whether the FCC may consider
additional factors or what weight, if any, it should give these four factors in making
its public interest determination. These four factors are not always easy to
objectively identify or measure; three involve commitments on the part of the
19 Ibid., at para. 67.
20 Ibid., at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(5) and (6).
21 This factor, which has no numerical limits, is used to review all proposed newspaper-
broadcast cross-ownership combinations and is distinct from one of the two criteria that
would reverse a negative public interest presumption — that the combination involve a
broadcast station that has not been offering local news programming but post-combination
would initiate seven hours of local newscasts.
22 2007 Order, at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(6).
23 Ibid., at paras. 68-75.

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CRS-6
applicant to future actions. Neither the rule nor the language in the 2007 Order
address what recourse the FCC or affected parties would have if the applicant did not
live up to its commitments once it obtained the license.
Given the mandatory public interest determination in the adopted rule, a
proposed newspaper-broadcast combination in a top-20 market, with eight or more
independent major media voices, and not involving a top-four television station,
although not presumptively inconsistent with the public interest, could nonetheless
be rejected by the Commission. Similarly, a proposed newspaper-broadcast
combination in a non-top-20 market, or in a market with fewer than eight
independent major media voices, or involving a top-four television station, and thus
presumptively inconsistent with the public interest, could nonetheless be approved
by the Commission.
On one hand, the complexity of the new rule potentially allows for a detailed,
sophisticated analysis of the public interest implications of a proposed newspaper-
broadcast station combination. On the other hand, its complexity, and the reliance
on commitments to future behavior and subjective factors, potentially allows a
majority of the Commission to justify whatever determination it reaches.
In its order adopting the new rule, the Commission stated:
To the extent that a proposed combination does not qualify for a positive
presumption, it will have a high hurdle to cross to win Commission approval.24
But in that same order, the Commission granted permanent waivers to five
newspaper-broadcast combinations25 although the combinations did not appear to
meet all the criteria to be presumptively in the public interest. The brief discussion
(comprised of a single paragraph plus footnotes) addressing these permanent waivers
did not provide the sort of detailed case-by-case analysis that some might expect to
be required to cross “a high hurdle.” Citing these waivers, the two FCC
commissioners who had dissented from the 2007 Order issued a strongly worded
statement questioning whether the new rule would be interpreted in a fashion that
would create “loopholes” that would allow many cross-ownership combinations that
are not presumptively in the public interest, rather than constituting a high hurdle to
limit such combinations.26
The FCC’s justification of the numerical limits in the rule. Since the
Third Circuit found that the FCC had failed to justify the numerical limits in the rules
it had adopted in 2003, and the new FCC rule incorporates a number of numerical
limits in both its positive and negative public interest presumptions, the 2007 Order
24 Ibid., at para. 68.
25 Ibid., at para. 77.
26 “Joint Statement by FCC Commissioners Michael J. Copps and Jonathan S. Adelstein on
Release of Media Ownership Order,” FCC New Release, February 4, 2008, available at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-280001A1.pdf], viewed on March
6, 2008.

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CRS-7
discussed the record evidence underlying each of the numerical elements in its new
newspaper-broadcast cross-ownership rule.27
! The FCC limited the presumption that a newspaper-broadcast
combination would be in the public interest to the top 20 DMAs
because there was evidence in the record showing differences
between the top 20 DMAs and all other DMAs, in terms of the
number of independent voices. The data showed that while there are
at least 10 independently owned television stations in 18 of the top
20 DMAs, none of the DMAs ranked 21 through 25 have 10
independently owned television stations; while 17 of the top 20
DMAs have at least two newspapers with a circulation of at least 5%
of the households in that DMA, four of the five DMAs ranked 21
through 25 have only one such newspaper.28
! The FCC limited the presumption that a newspaper-broadcast
combination would be in the public interest to markets in which
there still would be eight independent major media voices after the
combination because it found that these major media voices are
generally the most important and relevant outlets for news and
information in local markets today.29 It justified basing its
presumption on the number of major media voices — rather than all
media voices — by citing relatively unanimous support in the record
for the position that consumers continue predominantly to get their
local news from daily newspapers and broadcast television. Data on
the record show that consumers rely mostly on newspapers and
television for news and information. Other media outlets contribute
to diversity, but those other voices are not major sources of local
news or information, and thus they are not included in the definition
of major media voices.30 The FCC did not provide empirical
justification for the bright line numerical limit of eight independent
major media voices, however. It “selected the number eight for the
major media voice count because we are comfortable that assuring
that minimum number of major media voices in the top 20 markets
27 Since the new rule creates public interest presumptions based on numerical limits, but
requires case-by-case public interest determinations that can supersede the numerical limits,
it may well be that the courts will find that the burden on the FCC to justify the specific
numerical limits is lower than the burden required to justify the rules in the 2003 Order.
28 Ibid., at para. 56. The FCC also appears to rely on its finding that the top 20 markets, on
average, have 15.5 major voices (independently owned television stations and major
newspapers), 87.8 total voices (all independently owned television stations, radio stations,
and major newspapers), and approximately 3.3 million television households, while markets
21 through 30, by comparison, have, on average, 9.5 major voices, 65.0 total voices, and
fewer than 1.1 million television households. A comparison of these averages for the top
20 markets and the 21st through 30th markets, however, does not address whether the bright
line cutoff between the 20th and 21st markets is justified.
29 Ibid., at para. 57.
30 Ibid., at para. 58.

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— along with the other unquantified media outlets that are present
in those markets — will assure that these markets continue to enjoy
an adequate diversity of local news and information sources.”31 It
noted that all the top 20 markets have at least eight television
stations and one major newspaper, and stated that it did “not want to
allow a significant decrease in the number of independently owned
major media voices in any of those markets” and thus imposed the
requirement that there be at least eight major media voices post-
combination.
! The FCC limited the presumption that a newspaper-television
combination in the top 20 DMAs would be in the public interest to
those situations in which the television station is not one of the top
four rated stations in the market because it considered a daily
newspaper and the top four stations to be the most influential
providers of local news in their market; thus the combination of a
newspaper with a top four station is likely to cause greater harm to
diversity in the market than other combinations.32 Moreover, the
FCC believed “that combinations of newspapers and non-top four
television stations are more likely to result in the production of more
local news in furtherance of our localism goal.”33 According to the
FCC, the available data show that stations below the top four are less
likely to carry local news, and therefore more likely to carry “new
news” as a result of a newspaper combination; specifically, 86% of
stations ranked first through fourth in all DMAs provide local news,
averaging 2083 minutes, while only 40% of stations ranked fifth and
below in all DMAs provide some local news, averaging 458
minutes.34 While the top-four station numerical limit has intuitive
appeal since it conforms with the four major national broadcast
television networks (ABC, CBS, Fox, and NBC),35 it is not clear that
the cited data are relevant to a determination that the proper limit is
the top four stations. The FCC compares averages for the top four
stations to averages for all remaining stations, and finds sharp
differences. But these averages provide no information about
whether there is a significant change in the amount of local news
provided by the fourth and fifth stations in a market. Moreover, the
data presented are for all DMAs, but the presumption is limited to
the top 20 markets. The Commission does not indicate whether the
sharp difference in averages between the top four stations and all
31 Ibid., at para. 60.
32 Ibid., at para. 61.
33 Ibid., at para. 61.
34 Ibid., at para. 62.
35 However, the local affiliates of those four networks are not always the top-four rated
stations in a market. In particular, in several markets with large Hispanic populations, the
local Univision affiliate is among the four highest rated stations.

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CRS-9
additional stations that holds when looking at all DMAs also holds
when looking only at the top 20 markets.
! The FCC would reverse a negative presumption toward a proposed
newspaper/broadcast combination if the broadcast outlet has not
been offering local newscasts prior to the combination, but would
initiate local news programming of at least seven hours per week as
a result of the combination, because “the Commission has
historically considered [broadcasters’] news and public affairs
programming to be uniquely and particularly important,” and thus a
“positive presumption under this limited circumstance will increase
diversity of choices, provide more local programming, and allow
better local service by media outlets.”36 In the discussion of this
criterion for reversing a negative presumption, the Order provides
no explanation for how the Commission selected the seven hour
numerical limit. But in the discussion of factors to be used to rebut
a presumption, the Order states, without explanation, “we consider
a significant increase to be at least seven hours a week of additional
news in the market.”37 The discussion in the Order does not address
whether this criterion might create a perverse incentive. Yet an
existing station seeking to be purchased might expect that a local
newspaper would value that station more highly than other potential
purchasers from outside the market, and thus might have the
incentive to discontinue offering local news programming in order
to allow its purchase by that newspaper under the “initiates local
news programming” criterion.
! One of the four factors to be considered when confirming or
rebutting a public interest presumption about a proposed
combination is “whether the combined entity will significantly
increase the amount of local news in the market.”38 Interestingly, it
is in its discussion of this factor that the Commission references
seven hours of programming per week as a significant increase, but
in the rule, itself, there is no mention of seven hours or any measure
of a significant increase.39 Moreover, it appears that this factor
would only consider the impact of the proposed combination on the
amount of local news programming offered by the combining
newspaper and broadcast station. It would not consider the impact
of the proposed combination on total local news programming in
the local market. It is possible, however, that the combined
newspaper-broadcast entity could command advertising revenues
and audience share to the detriment of the other broadcasters in the
market, and that as a result those other broadcasters might reduce or
36 2007 Order, at para. 67.
37 Ibid., at para. 70.
38 Ibid., at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(5)(i).
39 Ibid., at Appendix A, p. 85, amending 47 C.F.R. 73.3555(d)(5)(i).

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eliminate their local news programming, which sometimes is
expensive to produce. The comments submitted in the record by a
group of consumer organizations40 included econometric studies that
purportedly show that newspaper-broadcast cross-ownership
decreases the total amount of local news provided in a market. In its
2007 Order, however, the FCC found “numerous difficulties” with
that analysis, however, and concluded that it “cannot rely on its
conclusions.”41 Nonetheless, it is not clear why the FCC would not
consider the impact of a proposed combination on the amount of
market-wide local news programming in its public interest
determination.
Challenges to the new rule. The new newspaper-broadcast cross-
ownership rule has been appealed both by parties opposing any loosening of the
FCC’s newspaper-broadcast cross-ownership rule and parties seeking greater
loosening of the rule.42 As indicated earlier, the new rule has been appealed by 15
parties and the Ninth Circuit was chosen at random to hear the challenges. It is likely
that an affected party that favors the rule change will petition the court to end the
current stay and allow the rule to go in effect pending court review.
In December 2007, just before the FCC voted to adopt the new rule, a bipartisan
group of 25 senators informed the FCC of its intention to pass a joint resolution of
disapproval to revoke the rule.43 A joint resolution of disapproval cannot be
introduced until the rule has been published in the Federal Register and transmitted
to Congress, however.44 On March 5, 2008, once the new rule had been transmitted
to Congress, Senator Dorgan introduced S.J.Res. 28, a resolution of disapproval to
40 See, for example, In the Matter of 2006 Quadrennial Regulatory Review — Review of the
Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section
202 of the Telecommunications Act of 1996; 2002 Biennial Regulatory Review; Cross-
Ownership of Broadcast Stations and Newspapers; Rules and Policies Concerning Multiple
Ownership of Radio Broadcast Stations in Local Markets; Definition of Radio Markets;
Ways to Further Section 257 Mandate and to Build on Earlier Studies, MB Docket Nos. 06-
121, 02-277, and 04-228 and MM Docket Nos. 01-235, 01-317, and 00-244, Further
Comments of Consumers Union, Consumer Federation of America, and Free Press, October
22, 2007
41 2007 Order, at paras. 43-44.
42 According to a “Broadcast” note in Communications Daily, March 7, 2008, the FCC’s
General Counsel’s office identified more than 10 parties that appealed the rule change
within 10 days of its publication in the Federal Register. Among the parties opposing any
loosening of the rule are Prometheus Radio Project, Free Press, and the United Church of
Christ. Among the parties favoring further loosening of the rule are Fox, Tribune, Sinclair,
Bonneville, the Scranton Times, Cox Enterprises, Media General, the National Association
of Broadcasters, and the Newspaper Association of America.
43 “Quarter of Senate Writes FCC Threatening to Revoke Media Rule,” BNA, Inc. Daily
Report for Executives, December 18, 2007.
44 For a detailed discussion of the process required for a joint resolution of disapproval, see
CRS Report RL30116, Congressional Review of Agency Rulemaking: An Update and
Assessment of the Congressional Review Act After a Decade, by Morton Rosenberg.

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CRS-11
block the new rule.45 On March 13, 2008, Representative Inslee introduced a
companion House resolution (H.J.Res. 79). Also, S. 2332 (introduced by Senator
Dorgan) and H.R. 4835 (introduced by Representative Inslee) would negate the rule
because they would require the FCC, before adopting any new broadcast ownership
rule after October 1, 2007, to give 90 days’ notice for public comment, which was
not done prior to adoption of the rule.46 In contrast, H.R. 4167 (introduced by
Representative Stearns) would eliminate the newspaper-broadcast radio (but not
television) cross-ownership prohibition in its entirety.
Television-Radio Cross-Ownership
In its 2003 Order, the FCC adopted a new, less restrictive Television-Radio
Cross-Ownership rule, but the Third Circuit remanded that rule and extended its stay
that left in place the rule that the FCC had adopted in 1999. That rule remains in
place today. Under the rule:
! An entity may own up to two television stations (provided it is
permitted under the Local Television Multiple Ownership rule) and
up to six radio stations (provided it is permitted under the Local
Radio Multiple Ownership rule) in a market where at least 20
independently owned media voices would remain post-merger.
! Where entities may own a combination of two television stations and
six radio stations, the rule allows an entity alternatively to own one
television station and seven radio stations.
! An entity may own up to two television stations (as permitted under
the Local Television Multiple Ownership rule) and up to four radio
stations (as permitted under the Local Radio Multiple Ownership
rule) in markets where, post-merger, at least 10 independently
owned media voices would remain.
! A combination of one television station and one radio station is
allowed regardless of the number of voices remaining in the
market.47
45 Anne Veigle, “Dorgan Resolution Would Bar Media Ownership Rules,” Communications
Daily, March 6, 2008, at p. 1.
46 S. 2332 and H.R. 4385 also would require the FCC to initiate, conduct, and complete a
separate rulemaking to promote the broadcast of local programming and content; require
the FCC to establish an independent Panel on Women and Minority Ownership of Broadcast
Media; and conduct a full and accurate census of the race and gender of broadcast owners.
47 47 C.F.R. 73.3555(c) as it existed prior to the FCC’s June 2, 2003 Order. For this rule,
media “voices” include independently owned and operating full-power broadcast television
stations, broadcast radio stations, English-language newspapers (published at least four
times a week), one cable system located in the market under scrutiny, plus any
independently owned out-of-market broadcast radio stations with a minimum share as
reported by Arbitron.

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CRS-12
In its 2007 Order, the FCC retained the existing Television-Radio Multiple-
Ownership rule, concluding that, in the absence of the cross-media limits that it had
adopted in 2003 but that the Third Circuit had remanded, the existing rule provided
protection for diversity goals in local markets and thereby served the public interest.48
Citing its 1999 Order creating the current rule, the Commission found that “Because
the two media ‘serve as substitutes at least to some degree for diversity purposes,’
there remains a need to retain a cross-ownership rule ‘to ensure that viewpoint
diversity is adequately protected.’”49 The Commission did not find support in the
record for either tightening or loosening the current rule.50
Local Television Multiple Ownership
In its 2003 Order, the FCC adopted a new, less restrictive Local Television
Multiple Ownership rule, but the Third Circuit remanded that rule and extended its
stay that left in place the rule that the FCC had adopted in 1999, which is sometimes
referred to as the “TV duopoly” rule. Under this rule, an entity may own two
television stations in the same DMA only if the following requirements are met:
! either the Grade B contours51 of the stations do not overlap, or
! (a) at least one of the stations is not ranked among the four highest-
ranked stations in the DMA, and (b) at least eight independently
owned and operating commercial or non-commercial full-power
broadcast television stations would remain in the DMA after the
proposed combination were consummated.52
This second option is sometimes referred to as the “top four ranked/eight voices test.”
An existing licensee of a failed, failing, or unbuilt television station may seek a
waiver of the rule.53 Any combination formed as a result of a failed, failing, or
48 2007 Order, at para. 82.
49 Ibid., at para. 84.
50 Ibid., at paras. 83-84.
51 Grade B is a measure of signal intensity associated with acceptable reception. The FCC’s
rules define this contour, often a circle drawn around the transmitter site of a television
station, in such a way that 50 percent of the locations on that circle are statistically predicted
to receive a signal of Grade B intensity at least 90 per cent of the time. Although a station’s
predicted signal strength increases as one gets closer to the transmitter, there will still be
some locations within the predicted Grade B contour that do not receive a signal of Grade
B intensity.
52 47 C.F.R. 73.3555(b); Local TV Ownership Report and Order, 14 FCC Rcd at 12907-08,
para. 8.
53 A “failed” station is one that has been dark for at least four months or is involved in
court-supervised involuntary bankruptcy or involuntary insolvency proceedings. Under the
standard for “failing” stations, a waiver is presumed to be in the public interest if the
applicant satisfies each of the following criteria: (1) one of the merging stations has had all-
day audience share of 4% or lower; (2) the financial condition of one of the merging stations
(continued...)

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CRS-13
unbuilt station waiver may be transferred together only if the combination meets the
Local Television Multiple Ownership rule or one of the three waiver standards at the
time of transfer.54
In its 2007 Order, the FCC found that:
in order to preserve adequate levels of competition within local television
markets, the local television ownership rule as it is currently in effect should be
retained.55
This finding reverses the finding in its 2003 Order that the existing rule was not
necessary to protect competition.56 The Commission also reversed the finding in its
2003 Order that the current rule potentially threatens local programming and that the
efficiencies to be gained by relaxing the rule could result in a higher quantity and
quality of local news and public affairs programming, finding that the evidentiary
record is unpersuasive regarding the effects of multiple ownership on local
programming.57
In its 2007 Order, the FCC reinstated the requirement that the applicant
demonstrate that the “in-market” buyer was the only reasonably available entity
willing and able to operate the subject station, which it had previously repealed.58 In
its Prometheus decision, the Third Circuit had remanded the repeal of that
requirement because the Commission had failed to address the original purpose of
the requirement — to ensure that qualified minority broadcasters had a fair chance
to learn that certain financially troubled, and consequently more affordable, stations
were for sale.59
Local Radio Multiple Ownership
The ownership limits currently in place are those that the FCC adopted in 1996
to codify the language in Section 202(b)(1) of the 1996 Telecommunications Act,
but, as a result of the Third Circuit agreeing in rehearing to lift the portion of its stay
relating to the FCC’s new methodology for defining local radio markets, those
53 (...continued)
is poor; (3) and the merger will produce public interest benefits. Under the standard for
“unbuilt” stations, a waiver is presumed to be in the public interest if an applicant meets
each of the following criteria: (1) the combination will result in the construction of an
authorized but as yet unbuilt station; and (2) the permittee has made reasonable efforts to
construct, and has been unable to do so. (47 C.F.R. 73.3555, Note 7 (1) and Local Television
Ownership Report, 14 FCC Rcd at 12941, para. 86.
54 Local TV Ownership Report and Order, 14 FCC Rcd at 12938-41, paras. 77, 81, 86.
55 2007 Order, at para. 87.
56 Ibid., at para. 101.
57 Ibid., at para. 103.
58 2007 Order, at paras. 96 and 105.
59 Prometheus, 373 F.3d at 420-421.

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CRS-14
markets are defined using that new methodology. Specifically, the current rules
provide that:
! in a radio market with 45 or more full power commercial and
noncommercial radio stations, an entity may own, operate, or control
up to eight commercial radio stations, not more than five of which
are in the same service (AM or FM);
! in a radio market with between 30 and 44 (inclusive) full power
commercial and noncommercial radio stations, an entity may own,
operate, or control up to seven commercial radio stations, not more
than four of which are in the same service (AM or FM);
! in a radio market with between 15 and 29 (inclusive) full power
commercial and noncommercial radio stations, an entity may own,
operate, or control up to six commercial radio stations, not more
than four of which are in the same service (AM or FM);
! in a radio market with 14 or fewer full power commercial and
noncommercial radio stations, an entity may own, operate, or control
up to five commercial radio stations, not more than three of which
are in the same service (AM or FM), except that an entity may not
own, operate, or control more than 50 percent of the stations in such
market.60
These numerical limits are applied to geographic markets that are defined
according to Arbitron rating boundaries, which are based on market factors rather
than on the signal transmission contours that previously were used to define
markets.61 Since Arbitron boundaries do not cover small radio markets, the FCC
performed a rulemaking proceeding to determine how to define geographic markets
in those small markets for which there are no Arbitron market definitions.62
Also, under current rules, when a “brokering” station has a Joint Sales
Agreement (JSA) with a “brokered” station — typically this authorizes one station
acting as a broker to sell advertising time for the brokered station in return for a fee
— the brokered stations counts toward the number of stations the brokering licensee
may own in a local market.63
In its 2007 Order, the FCC concluded that all the specific elements in the current
Local Radio Ownership rule — including the specific ownership tiers, numerical
limits, and AM/FM subcaps, as well as the market definitions revised in 2003 —
60 Section 202(b) also provides that the commission may permit a party to exceed these
limits “if the Commission determines that [it] will result in an increase in the number of
radio broadcast stations in operation.” 1996 Act, § 202(b)(2), 110 Stat. at 10-11.
61 2003 Order, at para. 239.
62 Ibid., at para. 239.
63 Ibid., at para. 239.

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CRS-15
remain “necessary in the public interest” to protection competition in local radio
markets,64 although it employs a different rationale for justifying these limits than it
used in its 2003 Order. In the 2007 Order, it found that
By maintaining the current numerical limits, we seek to guard against additional
consolidation of the strongest stations in a market in the hands of too few owners
and to ensure a market structure that fosters opportunities for new entry into
radio broadcasting. The number of commercial radio station owners declined by
39 percent between 1996 and 2007, with most of the decline occurring during the
first few years after the 1996 Act. Although the average number of commercial
owners across all Arbitron radio markets currently is 9.4, the largest commercial
firm in each Arbitron Metro market has, on average, 46 percent of the market’s
total radio advertising revenue, and the largest two firms have 74 percent of the
revenue. In 111 of the 299 Arbitron Metro markets, the top two commercial
station owners control at least 80 percent of radio advertising revenue. The top
four commercial firms also dominate audience share. And evidence in the record
indicates that the increase in concentration in commercial radio markets has
resulted in appreciable, albeit small, increases in advertising rates. All of this
data in the record supports the conclusion that the current numerical limits are
not unduly restrictive and that additional consolidation would not serve the
Commission’s competitive goals. (Footnotes omitted.)65
The Commission also found:
By preserving a healthy, competitive local radio market, the local radio
ownership rule helps promote our interest in localism. Aside from the positive
effect on localism that ensues from a competitive radio market, however, the
Commission has never found that the local radio ownership rule significantly
advances our interest in localism.66
Similarly, based on its examination of the record, the Commission
cannot conclude that the local radio ownership rule is necessary to protect format
diversity. Nevertheless, we find that retaining the current, competition-based
numerical limits on local radio ownership will promote diversity indirectly....
Thus, it is proper for us to retain the status quo, as the ownership tiers serve the
public interest in light of competition.67
In the 2007 Order, the Commission also found that retaining the current, competition-
based AM/FM subcaps “will promote diversity indirectly by facilitating and
encouraging entry into the local media market by new and underrepresented parties,
and we thus conclude that the AM subcaps are in the public interest.”68
64 2007 Order, at paras. 110, 116, 117, and 123.
65 Ibid., at para. 118.
66 Ibid., at para. 124.
67 Ibid., at para. 128.
68 Ibid., at para. 134.

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CRS-16
National Television Ownership (% Cap)
A broadcast network may own and operate local broadcast stations that reach,
in total, up to 39% of U.S. television households; entities that exceed the 39% cap
must divest as needed to come into compliance within two years; the FCC may not
forbear on applying the 39% cap; and the FCC is prohibited from performing the
quadrennial review of the 39% cap.69 In practice, the National Television Ownership
rule applies to the major broadcast networks, limiting them to ownership and
operation of local broadcast stations that reach, in total, the prescribed percentage of
U.S. television households.
When calculating the total audience reached by an entity’s stations, the so-
called “UHF discount” is applied — audiences of UHF stations are given only half-
weight.70 For example, if an entity owns a UHF station in a market with an audience
of two million households, that audience would only be counted as one million
households when calculating the entity’s market reach. In its 2007 Order, the FCC
found that
the Commission is foreclosed from addressing the issue of the UHF discount in
this proceeding by the 2004 Consolidated Appropriations Act. Although the Act
did not specifically mention the UHF discount, the Prometheus court observed
that the statutory 39 percent national cap would be altered if the UHF discount
were modified.... Accordingly, we conclude that the UHF discount is insulated
from review under Section 202(h).71
However, the Commission noted that the Third Circuit recognized that the FCC
might have authority, outside Section 202(h) to modify or eliminate the UHF
discount, and that the FCC had sought public comment on the scope of that authority
prior to the Third Circuit’s Prometheus decision.72 The Commission therefore
decided to separately address the extent of its authority to alter the UHF discount and
whether it should retain, revise, or eliminate the discount.

Dual Network Ownership
The Dual Network Ownership rule permits common ownership of multiple
broadcast networks, but prohibits a merger among the “top four” networks — ABC,
69 These requirements all are in Section 629 of the FY2004 Consolidated Appropriations
Act (P.L. 108-109, 118 Stat. 3 et seq.). The relevant FCC rule is 47 C.F.R. 73.3555(d)(1).
70 The Third Circuit concluded that challenges to the FCC’s decision to retain the 50% UHF
“discount” were moot “because reducing or eliminating the discount for UHF station
audiences would effectively raise the audience reach limit ... [which] would undermine
Congress’s specification of a precise 39% cap.” (Prometheus, 373 F.3d at 396). The
relevant FCC rule is 47 C.F.R. 73.3555(d)(2)(i).
71 2007 Order, at para. 143.
72 Ibid., at para. 144.

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CRS-17
CBS, Fox, and NBC.73 In both its 2003 Order and its 2007 Order, the FCC retained
the rule.74 In both reviews, the Commission found that the rule continues to be
necessary to promote competition in the national television advertising and program
acquisition markets, and that the rule promotes localism by preserving the balance
of negotiating power between networks and affiliates.
In 2001, as part of an earlier biennial review of its broadcast media ownership
rules, the FCC had modified this rule to allow the four major networks to own,
operate, maintain, or control broadcast networks other than the four majors. With
this change, Viacom, the owner of CBS, was allowed to purchase UPN, and NBC
was able to purchase Telemundo, the second largest Spanish-language network in the
United States.
Impact of the Broadcast Media Ownership Rules on Minority
Ownership
In its Prometheus decision, the Third Circuit also found that the FCC had failed
to address the impact of its new rules on minority ownership of broadcast stations
and instructed the Commission to address in its rulemaking process proposals for
advancing minority and disadvantaged businesses and for promoting diversity in
broadcasting that the Minority Media Telecommunications Council (MMTC) had
submitted in the proceeding in 2003.75
Responding to this court instruction, in December 2007 the FCC adopted an
order that implemented 12 of the 34 proposals to foster minority ownership of
broadcast stations that the Commission had put out for comment in an August 1,
2007, Second Further Notice of Proposed Rulemaking.76 Eligibility for these
programs was not limited, however, to minority or socially and economically
disadvantaged businesses, but rather was available to all small businesses.77 A
73 47 C.F.R. 73.658(g).
74 See 2003 Order, at para. 592, and 2007 Order, at para. 139.
75 Prometheus, 373 F.3d at 421, footnote 59.
76 In the Matter of Promoting Diversification of Ownership in the Broadcasting Services;
2006 Quadrennial Regulatory Review — Review of the Commission’s Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of
1996; 2002 Biennial Regulatory Review — Review of the Commission’s Broadcast
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996; Cross-Ownership of Broadcast Stations an Newspapers;
Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local
Markets; Definition of Radio Markets; Ways to Further Section 257 Mandate and to Build
on Earlier Studies, MB Docket Nos. 07-294, 06-121, 02-277, and 04-228 and MM Docket
Nos. 01-235, 01-317, and 00-244, Report and Order and Third Further Notice of Proposed
Rule Making, adopted on December 18, 2007 and released on March 5, 2008, available at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-217A1.pdf], viewed on March
5, 2008.
77 Commissioners Copps and Adelstein dissented in part from the order because they were
(continued...)

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CRS-18
companion Notice of Proposed Rulemaking sought comment on eligibility criteria
and on how best to improve FCC collection of data regarding the gender, race, and
ethnicity of broadcast licensees.
Underlying Issues:
Standard of Review, Bright Line Tests,
Case-by-Case Evaluations, and Waivers
The FCC has the statutory obligation to perform a quadrennial review of its
broadcast media ownership rules. In performing this review, the Commission must
address several fundamental issues that have potentially significant policy
implications. First, what is the relevant standard for reaching a public interest
determination about existing ownership rules? Second, what are the advantages and
disadvantages of using bright line tests vs. case-by-case evaluations when making a
public interest determination about a proposed ownership transactions that would
increase media concentration? Is there a distinction between the two approaches
when there is a waiver process available to parties that do not meet a bright line test?
Standard of Review
There has been some controversy surrounding the standard to be used in
reaching a public interest determination about the existing rules. The D.C. Circuit,
in Fox Television Stations, Inc. v. Federal Communications Commission, stated
“Section 202(h) carries with it a presumption in favor of repealing or modifying the
ownership rules.”78 Further, in response to petitions for rehearing, the D.C. Circuit
stated “[T]he statute is clear that a regulation should be retained only insofar as it is
necessary in, not merely consonant with, the public interest.”79 But in the same
decision, the D.C. Circuit stated that “[t]he Court’s decision did not turn at all upon
interpreting ‘necessary in the public interest’ to mean more than ‘in the public
interest’” and added “we think it better to leave unresolved precisely what § 202(h)
means when it instructs the Commission first to determine whether a rule is
77 (...continued)
concerned that people of color and women would not benefit appreciably from, and might
be harmed by, these programs if eligibility is not specifically targeted to socially and
economically disadvantaged businesses. See “Statement of Commissioner Michael J.
Copps, Concur in Part, Dissent in Part,” December 18, 2007, available at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-279035A3.pdf], viewed on March
6, 2008, and “Statement of Commissioner Jonathan S. Adelstein, Concur in Part, Dissent
in Part,” December 18, 2007, available at [http://hraunfoss.fcc.gov/edocs_public/
attachmatch/DOC-279035A4.pdf], viewed on March 6, 2008.
78 280 F.3d 1048.
79 293 F.3d 539.

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CRS-19
‘necessary in the public interest’ but then to ‘repeal or modify’ the rule if it is simply
‘no longer in the public interest.’”80
In its 2003 Order, the FCC majority took this language to mean that the
Commission must overcome a high burden to retain any ownership rule. Responding
to a question from Senator McCain in a June 4, 2003 Senate Commerce Committee
hearing, then-FCC chairman Powell stated that the D.C. Circuit interprets the act to
be “biased toward deregulation” and added that for the Commission to be in concert
with that interpretation it “cannot re-regulate.” In response to a question from
Senator Dorgan, then-FCC commissioner Abernathy stated that the D.C. Circuit’s
interpretation directs the Commission to minimize regulation as competition
develops, not to regulate to maximize the number of voices.
At that same hearing, all five FCC commissioners and several Senators agreed
that it would be useful for Congress to provide both the Court and the Commission
guidance on the standard to use for reviewing ownership rules and on whether the act
allows the commission to re-regulate broadcast ownership.
Subsequently, in its Prometheus decision, the Third Circuit found:
While we acknowledge that § 202(h) was enacted in the context of deregulatory
amendments (the 1996 Act) to the Communications Act, see Fox I, 280 F.3d at
1033; Sinclair, 284 F.3d at 159, we do not accept that the “repeal or modify in
the public interest” instruction must therefore operate only as a one-way ratchet,
i.e., the Commission can use the review process only to eliminate then-extant
regulations. For starters, this ignores both “modify” and the requirement that the
Commission act “in the public interest.” ...
Rather than “upending” the reasoned analysis requirement that under the APA
ordinarily applies to an agency’s decision to promulgate new regulations (or
modify or repeal existing regulations), see State Farm, 463 U.S. at 43, § 202(h)
extends this requirement to the Commission’s decision to retain its existing
regulations. This interpretation avoids a crabbed reading of the statute under
which we would have to infer, without express language, that Congress intended
to curtail the Commission’s rulemaking authority to contravene “traditional
administrative law principles.”81
Bright Line Tests, Case-by-Case Evaluations, and Waivers
In its 2003 Order, the FCC reviewed the advantages and disadvantages of
implementing bright line rules that incorporate specific limits on the number of
media outlets a company can own in a local market (without regard to such market-
specific characteristics as the market share of the post-merger company or the degree
to which the merging company is vertically integrated into program production) vs.
implementing flexible, yet quantifiable rules that would allow for case-by-case
reviews that more readily take into account market-specific or company-specific
market shares and characteristics.
80 293 F.3d 540.
81 Prometheus, 373 F.3d at 394 (emphasis in original).

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CRS-20
The Commission chose the bright line approach, in large part because it
identified regulatory certainty as an important policy goal in addition to the three
traditional goals of diversity, competition, and localism.82 The Commission stated:
Any benefit to precision of a case-by-case review is outweighed, in our view, by
the harm caused by a lack of regulatory certainty to the affected firms and to the
capital markets that fund the growth and innovation in the media industry.
Companies seeking to enter or exit the media market or seeking to grow larger
or smaller will all benefit from clear rules in making business plans and
investment decisions. Clear structural rules permit planning of financial
transactions, ease application processing, and minimize regulatory costs.83
It concluded that the adoption of bright line rules rather than case-by-case analysis
provides certainty to outcomes, conserves resources, reduces administrative delays,
lowers transactions costs, increases transparency of process, and ensures consistency
in decisions, all of which foster capital investment in broadcasting. The Commission
conceded that bright line rules preclude a certain amount of flexibility.
The 2003 Order did not explain how the Commission would weigh the goal of
regulatory certainty vis-à-vis the traditional goals of diversity, competition, and
localism, if the former were to be in conflict with one or more of the latter. On one
hand, the Commission stated that it would continue to have discretion to review
particular cases, and would have an obligation to take a hard look both at waiver
requests (where a bright line ownership limit would proscribe a particular
transaction) and at petitions to deny a license transfer (where a bright line ownership
limit would allow a particular transaction). At the same time, however, it suggested
it would not look favorably upon some petitions:
Bright lines provide the certainty and predictability needed for companies to
make business plans and for capital markets to make investments in the growth
and innovation in media markets. Conversely, case-by-case review of even
below-cap mergers on diversity grounds would lead to uncertainty and
undermine our efforts to encourage growth in broadcast services. Accordingly,
petitioners should not use the petition to deny process to relitigate the issues
resolved in this proceeding.84
Having determined that a bright line test was preferable to case-by-case review,
the Commission created bright line tests for its broadcast media cross-ownership and
local ownership rules. The Third Circuit found that the Commission’s decision to
retain a bright line numerical limits approach to broadcast ownership rules was
“rational and in the public interest,”85 but found the methodology used by the
Commission to set those numerical limits arbitrary.
82 2003 Order at paras. 80-85. In the section on Policy Goals, there are four subsections —
Diversity, Competition, Localism, and Regulatory Certainty.
83 Ibid., at para. 83, fn. omitted.
84 Ibid., at para. 453, fn. 980.
85 Prometheus, 373 F.3d at 431.

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CRS-21
In its 2007 Order, the FCC has changed direction, opting for a rule that
incorporates elements of both a bright line approach (presumptions with specific
numerical limits) and a case-by-case approach (factors that the Commission would
consider in the case-by-case review of both combinations that met the presumption
of being in the public interest and combinations that did not). The FCC was
motivated in part by the fact that elements of the evidentiary record were
inconclusive and therefore not supportive of strict bright line numerical limits. The
Commission found:
The inconclusiveness of some of the data and disagreement as to the outcome of
the studies, however, supports our decision to undertake a case-by-case review
of particular combinations in particular markets, rather than providing hard,
across-the-board limits. Under our method, we can consider facts in a particular
case, with a presumption in favor of allowing newspaper and radio station or
non-top four television station combinations in the top 20 markets, and a
presumption against combinations in all other markets. A case-by-case approach
will enable the Commission to make a more fully informed assessment that a
proposed transaction in a particular market actually will increase the total amount
of local news generated by the combined outlets.86
Establishing presumptions, as opposed to a bright line, will allow for the
evaluation of proposed newspaper/broadcast combinations under defined
circumstances on a case-by-case basis.87
At the same time, the FCC concluded in its 2007 Order that, based on the evidentiary
record in the proceeding, it was appropriate to maintain the current numerical limits
in its other broadcast ownership rules.88 In that Order, however, the Commission did
not present data to support all the specific numerical limits in those rules.
Thus, currently, most of the broadcast media ownership rules have bright line
numerical limits, but the newspaper-broadcast cross-ownership rule is more flexible,
requiring the FCC to make a case-by-case public interest evaluation.
There may not be a sharp distinction, however, between rules with bright line
numerical limits and rules requiring case-by-case evaluations because parties may
seek waivers of bright-line rules and, to the extent the FCC grants such waivers, the
effect may be to provide equal or even greater flexibility. This is particularly
apparent in recent FCC waiver decisions involving newspaper-broadcast station
combinations in local markets.
When the FCC adopted its new newspaper-broadcast cross-ownership rule, in
the same Order it granted permanent waivers to five newspaper-broadcast
combinations.89 As explained earlier, the combinations that were granted waivers did
not appear to meet all the criteria in the new rule to be presumptively in the public
86 2007 Order, at para. 46.
87 Ibid., at para. 52.
88 See, for example, 2007 Order, at para. 113.
89 Ibid., at para. 77.

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interest and the brief discussion addressing these permanent waivers did not provide
the sort of detailed case-by-case analysis that would appear to be required under the
new rule.
These waiver grants followed closely upon controversial waiver grants made by
the Commission in November 2007. At that time, the FCC issued a Memorandum
Opinion and Order, with commissioners Copps and Adelstein dissenting,90 granting
the applications to transfer control of Tribune Company and its licensee subsidiaries
from the existing shareholders to Sam Zell, the Tribune Employee Stock Ownership
Plan, and EGI-TRB, LLC. The transferees had requested temporary, but indefinite,
waiver of the newspaper-broadcast cross-ownership rule to permit common
ownership pending the outcome of the Media Ownership proceeding of: KTLA(TV),
Los Angeles, and the Los Angeles Times; WPIX(TV), New York, and Newsday;
WGN-TV and WGN(AM), Chicago, and the Chicago Tribune; WSFL(TV), Miami,
and the Ft. Lauderdale South Florida Sun-Sentinel; and WTIC(TV), Hartford,
WTTX(Waterbury), and the Hartford Courier. The FCC denied the requested
waivers in all the markets except Chicago, requiring the Transferees to come into
compliance with the newspaper-broadcast cross-ownership rule in all the markets
except Chicago within six months. However, the order noted that the Commission
was scheduled to vote on a revised newspaper-broadcast cross-ownership rule at its
December 18, 2007, meeting, and therefore took the following three steps:
! The six-month clock for coming into compliance with the
newspaper-broadcast cross-ownership rule in New York, Los
Angeles, Miami, and Hartford would not begin running until January
1, 2008.
! Should the FCC adopt a revised newspaper-broadcast cross-
ownership rule before January 1, 2008, that six-month clock would
not begin to run. Rather, the applicants would receive a two-year
waiver of the rule for the New York, Los Angeles, Miami, and
Hartford markets.
! Should the applicants choose to challenge the denial of waivers in
court, they were granted a temporary waiver of the newspaper-
broadcast cross-ownership rule for the New York, Los Angeles,
Miami, and Hartford markets that would last either for two years or
until six months after the conclusion of the litigation, whichever is
longer.
90 In the Matter of Shareholders of Tribune Company, Transferors and Sam Zell, et al.,
Transferees, for Consent to the Transfer of Control of the Tribune Company and
Applications for the Renewal of License of KTLA(TV), Los Angeles, California, et al., MB
Docket No. 07-119 and File Nos. BRCT-20060811ASH, et al., Memorandum Opinion and
Order, adopted and released November 30, 2007. The Memorandum Opinion and Order and
the statements of four commissioners, including the two dissenting commissioners, is
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-211A1.pdf], viewed
on March 6, 2008.

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The applicants did file an appeal on December 3, 2007, of the denial of its request for
indefinite waivers in the U.S. Court of Appeals court.91
In dissenting from the FCC decision, Commissioner Michael Copps stated:
If the majority simply granted a two-year waiver to Tribune — which would have
been the straightforward thing to do — Tribune would have been unable to go
to court because a party cannot file an appeal if their waiver request is granted.
So what does this Order do? It denies the waiver request but offers an automatic
(and unprecedented) waiver extension as soon as Tribune runs to the courthouse
door, lasting for two years or until the litigation concludes — whichever is
longer. Presto! Tribune gets at least a two-year waiver plus the ability to go to
court immediately and see if they can get the entire rule thrown out. And most
important, Tribune is not required to seek a hearing before the very court which
expressly retained jurisdiction when it remanded the general newspaper-
broadcast cross-ownership ban. Instead, Tribune can end run the Third Circuit
and petition for review before what it may hope is a more sympathetic court.
(emphasis in original.)92
The Tribune waiver and the waivers in the 2007 Order lend at least the
appearance that the majority at the FCC used the existing waiver process to approve
newspaper-broadcast combinations that might not have met the requirements of
either the old or the new cross-ownership rule. This suggests that it may be less
important whether the ownership rules have bright lines or require case-by-case
evaluations. Both the waiver process for bright line rules and the evaluation process
for case-by-case public interest determinations appear to give the FCC
commissioners a significant degree of discretion in their decision making and allow
them to choose to enforce ownership limits more or less stringently.
91 See, for example, “Tribune appeals FCC ruling,” Hollywood Reporter, December 7,
2007.
92 See fn. 90 above.

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