The FCC's policy of designating questionable radio mergers for lengthy reviews by agency judges hasn't been too popular. In fact, the two targets slated so far have either canceled or postponed deals rather than go through expensive and time-consuming rounds of filings and judicial motions.
That hasn't stopped the FCC from trying. Last week, the commission said acquisitions in three markets by Clear Channel, the country's largest radio group, created too much concentration and would not be in the public interest. It ordered judges to review each deal (the FCC cannot reject deals without judicial review).
Clear Channel's Washington lawyer said it was too soon to know whether the company would pursue those deals or drop them to avoid review that could well result in rejections. The company already has postponed plans to close a deal in Charlottesville, Va., rather than submit to the process, deferring the judicial proceeding to find whether it complies with final radio-concentration rules, ex-pected to be issued spring 2003.
The hearing process was established in March as part of an interim policy for resolving "flagged" deals. The flagging process adds an extra layer of review when mergers otherwise comply with limits on the number of stations one company can own in a market but would allow one company to control 50% of a market's ad revenue or two companies to control 75%.
Clear Channel's purchase of KFLX(FM) Nolanville, Texas, from Sheldon Broadcasting would give Clear Channel control 53% of radio advertising in the Killeen-Temple metro area and put 98% of radio ad revenue in the hands of the top two station owners. The purchase of WSKW(AM) and WHQO(FM) Augusta-Waterville, Maine, from Mountain Wireless and of WNIO(AM), WNCD(FM), WICT(FM) and WAKZ(FM) Youngstown, Ohio, from Youngstown Radio would give Clear Channel and the other top owner in those markets control of 99.5% and 95.3% of ad revenue, respectively.