Clear Channel to defend merger

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A Federal Communications Commission administrative law judge will decide whether Clear Channel Communications Inc. will be permitted to buy WUMX(FM) Charlottesville, Va., from Air Virginia Inc. The
deal is one of five radio mergers stalled by regulators for more than one year
under a controversial practice aimed at preventing undue concentration in local
markets.

The other four deals in Columbus, Ga.; Cheyenne, Wyo.; Trenton, N.J.; and
Starkville, Miss., were approved by the FCC late Tuesday. In those markets,
consummation of the mergers would serve the public interest, the commission
found. For example, in Trenton, "in-market" stations capture only 36.7 percent of
the audience, while the remaining 63.3 percent listen to "out-of-market
stations." Also, since operating WNJO(FM) under a local marketing agreement,
Clear Channel "considerably improved the station's performance through improved
local news, weather and information," FCC chairman Michael Powell said.

In the Cheyenne market, Clear Channel is buying two stations in Laramie, Wyo., where
a mountain blocks signals, thus creating two separate advertising markets.

In Columbus, Ga., "Significant format and radio-advertising competition would
continue to exist."

In Columbus-Starkville, Miss., "Potential for competitive harm was outweighed
by the benefits increased locally generated programming."

In Charlottesville, however, Clear Channel's attempt to buy WUMX(FM) would
create a combined 94.2 percent market share between the market's two largest
owners. "This level of concentration, in the absence of any countervailing
considerations or public-interest benefits, is simply too significant for us,"
Powell said.

Democratic commissioner Michael Copps opposed all of the mergers except the
Cheyenne-Laramie deal. "In these relatively small radio markets, the
anti-competitive effects of such high levels of concentration are likely to be
especially pronounced," he said. Copps added that the FCC -- which currently has a
rulemaking under way to set clear rules for radio mergers in highly concentrated
markets -- is setting an "unacceptable standard for concentration in local radio
markets."

The five deals were stalled because of the FCC's "flagging" policy, which
subjected deals to added scrutiny when they would place the majority of a
market's ad revenue with one or two owners. The 1998 edict was contentious
because the commission had no clear policy of resolving the mergers. Since the
policy was established, more than 100 deals have been slowed by the intense
reviews, but none has been denied.

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