Capital Watch


Clear Channel Drops Stalled Deals—for Now?

Clear Channel has quietly given up on four radio acquisitions the FCC had slated for lengthy and expensive reviews. The commission "flagged" the mergers for concentrating ad revenue in their markets. The policy, abandoned in June, once bogged down scores of radio mergers and was a sore point with broadcasters when it was established in 1998. The industry complained because the FCC waited years before deciding how to resolve affected deals.

Many purchases were delayed by the policy, which extended public comment when one company would control 50% of a market's ad dollars or two companies would control 75%. The policy was imposed by former FCC Chairman William Kennard to stem the tidal wave of consolidation after Congress removed national radio-ownership limits in 1996.

Although many mergers were delayed, only industry leader Clear Channel was actually ordered to subject deals to an FCC judge. The reviews were ordered for buys in Nolanville, Texas; Charlotte, Va.; Youngstown, Ohio; and Skowhegan, Maine. With the policy abandoned, some in Washington speculate that Clear Channel will simply resubmit new applications after the pending ones are formally dismissed. Clear Channel officials did not comment by deadline.

DBS Channels Hit Auction Block

Three DBS licenses for a total of 93 channels will be auctioned July 14, the FCC announced last week. The licenses cover orbital locations at 175 and 166 degrees west longitude with 32 channels each and at 157 degrees west with 29 channels.

EchoStar already owns three of the channels at 157 degrees. Bidding on the remainder requires an upfront payment of $2.9 million and a minimum opening bid of $5.8 million. That's $200,000 per channel. The other two licenses require upfront payments of $1.6 million each and minimum bids of $3.2 million each, or $100,00 per channel.

The FCC originally planned to auction all the new DBS channels last August but postponed the sale until eligibility criteria were established. The licenses will not reach the East Coast but will cover the rest of the continental U.S., Alaska, Hawaii, Australia, and parts of Asia. Licenses for two channels reaching the entire U.S. mainland at 61.5 degrees will not be included in the auction as once expected.

FDA Wants Reform of Medical Device Ads

Hearing aids and other medical devices may fall under the same broadcast advertising standards as pharmaceuticals. Under a proposal by the Food and Drug Administration, advertisers would be encouraged to disclose the most serious and common risks associated with a device and give a toll-free number for receiving more detailed information by phone, mail, or the Web.

The proposal coincided with suggested revisions to pharmaceutical print ads. The FDA wants to replace the small-print list of all a drug's risks with less-comprehensive but more consumer-friendly risk notices. Similar revisions to broadcast prescription drug ads are being considered.

I want TiVO, iPOD

Broadband providers risk the heavy hand of government regulation if they block consumers from designing home networks, warned FCC Chairman Michael Powell. Unveiling "Net Freedom" principles to dotcom types Feb. 8, he admonished some cable providers for "troubling restrictions" on service agreements, such as limits on attaching TiVo boxes, iPODs, Gamecubes and WiFi connections to home broadband networks. So far, the case for government oversight is "unconvincing and speculative," but he warned that consumers will demand it unless providers balance business strategies with Internet freedom.