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December 14, 2007: 

The Honorable Edward J. Markey: 
Chairman: 
Subcommittee on Telecommunications and the Internet: 
Committee on Energy and Commerce: 
House of Representatives: 

Subject: Telecommunications: Preliminary Information on Media 
Ownership: 

Dear Mr. Chairman: 

The media play an important role in educating and entertaining the 
public and fostering an informed citizenry; thus the ownership of media 
outlets has been a long-standing concern of the Congress. The Federal 
Communications Commission (FCC) regulates many aspects of the media 
industry, including radio and television stations and cable and 
satellite service. In the Telecommunications Act of 1996 (1996 Act), 
the Congress required that FCC periodically review its media ownership 
rules. In 2003, FCC released an order that altered its existing media 
ownership rules. This order generated significant public debate, and 
more than 500,000 comments were filed with FCC. The U.S. Court of 
Appeals for the Third Circuit affirmed some of FCC's rule changes while 
remanding others for further justification or modification;[Footnote 1] 
most of the rule changes have not gone into effect. In response to the 
court's decision and the congressional mandate for periodic review of 
its rules, FCC has another proceeding underway to assess its media 
ownership rules. This proceeding has attracted significant attention 
from both the public and the Congress, and has raised concerns about 
the level of consolidation in the media industry. 

While today's media environment provides the public with numerous 
programming choices from across the country, media outlets in local 
markets remain a concern for policymakers. With cable and satellite 
service, the public can receive programming from nationwide outlets, 
such as CNN and FOX News, and television stations in adjacent markets. 
However, media outlets located in a market are more likely to provide 
local news, public affairs, and political programming addressing the 
needs of residents in that market, such as coverage of local political 
campaigns, compared to nationwide and adjacent-market outlets. 
Reflecting the importance of local media outlets, localism is one of 
FCC's three policy goals for media ownership. 

You asked us to examine the current status of media ownership. In this 
report, we provide preliminary information on (1) the presence and 
ownership of various media outlets, (2) the level of minority-and women-
owned broadcast outlets, and (3) stakeholders' opinions on modifying 
certain media ownership laws and regulations. We plan to issue a final 
report on this work in several months. 

To respond to the objectives of this report, we interviewed officials 
from FCC, the National Telecommunications and Information 
Administration (NTIA) of the Department of Commerce, and trade 
associations. Additionally, we conducted structured interviews with 102 
industry officials and experts, selected based on industry sector (such 
as television and radio stations, broadcast networks, newspapers, and 
cable and satellite companies), geographic service territory, size of 
the media outlet, and professional publications (for experts). To 
assess the presence and ownership of media outlets, we conducted case 
studies in 16 Nielsen Designated Market Areas (DMA).[Footnote 2] To 
select the 16 case study markets, we used a stratified random sample 
methodology: we (1) randomly selected four case study markets from each 
of three market strata (large, medium, and small), (2) selected the 
three largest markets as a separate stratum, and (3) judgmentally 
selected one market from the medium-size category to test our data 
collection and structured interview methodology. The 16 case study 
markets that we analyzed include approximately 20 percent of all 
television households in the United States. In each case study market, 
we identified the number of television and radio stations, newspapers 
(daily and weekly), and cable and satellite companies present in the 
central city of the DMA. We also identified the number of owners of 
these media outlets. 

We conducted our review from February 2007 through December 2007 in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

The numbers of media outlets and owners of media outlets generally 
increase with the size of the market, although operating agreements may 
reduce the effective number of independent outlets. Markets with large 
populations have more television and radio stations and newspapers than 
less-populated markets. For example, in New York City, the nation's 
largest market, we identified 21 television stations and 73 radio 
stations. In contrast, we found 2 television stations and 16 radio 
stations in Harrisonburg, Virginia, the smallest market in our review. 
In more diverse markets, we also observed more radio and television 
stations and newspapers operating in languages other than English, 
which contributed to a greater number of outlets. While we focused on 
media outlets located in specific markets, residents, in some 
instances, may be able to receive television and radio signals from 
stations located in adjacent markets. Some companies participate in 
agreements to share content or agreements that allow one company to 
produce programming or sell advertising through two outlets, among 
other agreements. In our review, these agreements were prevalent in a 
variety of markets but not in the top three markets, suggesting that 
market size may influence the benefits that companies realize through 
such agreements. To some degree, these agreements may suggest that the 
number of independently owned media outlets in a market might not 
always be a good indicator of how many independently produced local 
news or other programs are available in a market. 

Ownership of broadcast outlets by minorities and women appears limited, 
but comprehensive data are lacking. FCC collects data on the gender, 
race, and ethnicity of radio and television station owners biennially 
through its Ownership Report for Commercial Broadcast Stations, or Form 
323. However, we found that these data suffer from three weaknesses: 
(1) exemptions from filing for certain types of broadcast stations, 
such as noncommercial stations; (2) inadequate data quality procedures; 
and (3) problems with data storage and retrieval. While reliable 
government data on the ownership by minorities and women are lacking, 
available evidence from FCC and nongovernmental reports suggests that 
ownership of broadcast outlets by these groups is limited. For example, 
reports by Free Press, a nongovernmental organization, found that women 
and minorities own about 5 percent and 3 percent of full-power 
televisions stations, respectively, and about 6 percent and 8 percent 
of full-power radio stations, respectively. 

Stakeholders expressed varied opinions about the media ownership rules 
under review by FCC. Among the stakeholders we interviewed, there was 
little consensus on modifications to existing laws and regulations 
related to media ownership. However, stakeholders representing business 
interests were more likely to support deregulatory positions while 
nonbusiness stakeholders were more likely to support enhancing or 
leaving existing rules in place. Moreover, both business and 
nonbusiness stakeholders who expressed an opinion on a previously 
repealed tax certificate program supported either reinstating or 
expanding the program to encourage the sale of broadcast outlets to 
minorities. 

Background: 

Various laws and regulations constrain the ownership of television and 
radio stations. Five restrictions on the ownership of television and 
radio stations follow: 

* National television ownership cap. A single entity can own any number 
of television stations nationwide as long as the stations collectively 
reach no more than 39 percent of national television households. For 
purposes of calculating the 39 percent limit, ultra-high frequency 
(UHF) television stations are attributed with 50 percent of the 
television households in their market. 

* Local television ownership limit. A single entity can own two 
television stations in the same DMA if (1) the "Grade B" 
contours[Footnote 3] of the stations do not overlap or (2) at least one 
of the stations is not ranked among the top four stations in terms of 
audience share and at least eight independently owned and operating 
full-power commercial and noncommercial television stations would 
remain in the DMA. In general, no entity can own more than two 
television stations whose Grade B contours overlap regardless of 
whether (1) the stations are not among the top four stations in terms 
of audience share and (2) at least eight independently owned and 
operating full-power commercial and noncommercial stations would remain 
in the DMA. 

* Local radio ownership limit. A single entity can own up to 5 
commercial radio stations, not more than 3 of which are in the same 
service (that is, AM or FM), in a market with 14 or fewer radio 
stations; up to 6 commercial radio stations, not more than 4 of which 
are in the same service, in a market with 15 to 29 radio stations; up 
to 7 commercial radio stations, not more than 4 of which are in the 
same service, in a market with 30 to 44 radio stations; and up to 8 
commercial radio stations, not more than 5 of which are in the same 
service, in a market with 45 or more radio stations; except that an 
entity can not own, operate, or control more than 50 percent of the 
stations in a market.[Footnote 4] 

* Newspaper-broadcast cross-ownership ban. A single entity cannot have 
common ownership of a full-service television or radio station and a 
daily newspaper[Footnote 5] if the television station's "Grade A" 
contour or the radio station's principal community service area 
completely encompass the newspaper's city of publication.[Footnote 6] 

* Television-radio cross-ownership limit. A single entity can own up to 
2 television stations (if permitted under the Local Television Multiple 
Ownership Cap) and up to 6 radio stations (if permitted under the Local 
Radio Multiple Ownership Cap) or 1 television station and 7 radio 
stations in a market with at least 20 independently owned media voices 
remaining post merger; up to 2 television stations and up to 4 radio 
stations in a market with at least 10 independently owned media voices 
remaining post merger; and 1 television station and 1 radio station 
regardless of the number of independently owned media voices.[Footnote 
7] 

In the 1996 Act, the Congress required FCC to conduct a biennial review 
of its media ownership rules to determine "whether any such rules are 
necessary in the public interest as the result of competition" and to 
"repeal or modify any regulation it determines to be no longer in the 
public interest."[Footnote 8] In its 2002 biennial review, FCC adopted 
several important changes to its media ownership regulations. FCC 
increased the caps on ownership of local television stations, increased 
the nationwide television ownership cap, eliminated the prohibition on 
joint ownership of a broadcast outlet and a newspaper in some 
instances, and raised the caps on joint ownership of television and 
radio stations in local markets. In 2004, the U.S. Court of Appeals for 
the Third Circuit affirmed some of FCC's rule changes while remanding 
others for further justification or modification; most of the rule 
changes have not gone into effect. In 2006, FCC released a Further 
Notice of Proposed Rule Making concerning its media ownership 
rules.[Footnote 9] FCC initiated the rule making to address the issues 
posed by the Court of Appeals as well as to fulfill the congressional 
mandate for periodic review of its media ownership rules.[Footnote 10] 

Since the 1970s, the number of media outlets has increased 
dramatically, with large increases in the number of television and 
radio stations. In the case of television, the number of full-power 
television stations increased from 875 in 1970 to 1,754 in 2006; this 
increase occurred in both commercial and noncommercial educational 
television stations.[Footnote 11] Moreover, the number of broadcast 
networks that supply programming to stations across the country 
increased from three major networks (ABC, CBS, and NBC) to four major 
networks (ABC, CBS, FOX, and NBC) and several smaller networks, such as 
The CW Television Network, MY Network TV, and ION Television Network. 
In the case of radio, the number of full-power radio stations more than 
doubled, from 6,751 stations in 1970 to 13,793 stations in 2006, with 
increases in AM, FM, and FM educational stations.[Footnote 12] Daily 
newspapers illustrate a different trend--decreasing from 1,763 in 1970 
to 1,447 in 2006. While the number of morning newspapers increased from 
334 in 1970 to 833 in 2006, the number of evening newspapers decreased 
by more than half, from 1,429 to 614. Table 1 illustrates the trends in 
television and radio stations and newspapers. 

Table 1: Number of Full-Power Television and Radio Stations and Daily 
Newspapers: 

Media category: Television station; 
Number of outlets by year: 1970: 875; 
Number of outlets by year: 1990: 1,465; 
Number of outlets by year: 2006: 1,754. 

Media category: Radio station; 
Number of outlets by year: 1970: 6,751; 
Number of outlets by year: 1990: 10,770; 
Number of outlets by year: 2006: 13,793. 

Media category: Daily newspaper; 
Number of outlets by year: 1970: 1,763; 
Number of outlets by year: 1990: 1,643; 
Number of outlets by year: 2006: 1,447. 

Media category: Morning; 
Number of outlets by year: 1970: 334; 
Number of outlets by year: 1990: 559; 
Number of outlets by year: 2006: 833. 

Media category: Evening; 
Number of outlets by year: 1970: 1,429; 
Number of outlets by year: 1990: 1,084; 
Number of outlets by year: 2006: 614. 

Source: GAO analysis of data from FCC and the Newspaper Association of 
America. 

[End of table] 

While the number of media outlets has increased, the ownership of 
outlets also has evolved. Beginning in the late 1980s, the broadcast 
networks increasingly have become affiliated with companies that 
provide program production services, as happened when The Walt Disney 
Company acquired ABC. Each of the four major broadcast networks also 
owns television stations that reach more than 20 percent of the 
nation's television households. Following the passage of the 1996 Act, 
several companies acquired a large number of radio stations. Clear 
Channel owns over 1,000 radio stations throughout the United States, 
and Cumulus Broadcasting and Citadel Communications each own over 200 
stations. Finally, four companies--Comcast, DirecTV, Time Warner, and 
EchoStar--provide service to nearly two-thirds of subscribers to cable 
television or direct broadcast satellite service; additionally, many 
nonbroadcast networks, such as CNN and ESPN, are owned by cable 
companies or broadcast networks.[Footnote 13] 

In recent years, some companies have taken steps to sell assets. In 
2005, Viacom split into two separate companies: Viacom and CBS 
Corporation.[Footnote 14] In 2006, The McClatchy Company acquired 
Knight Ridder and subsequently sold 12 former Knight Ridder newspapers. 
Also in 2006, Clear Channel announced plans to sell 448 radio stations, 
all in markets outside the top 100, and its entire television station 
group.[Footnote 15] More recently, The New York Times Company sold its 
television stations. Alternatively, the two satellite radio companies-
-Sirius and XM--have proposed a merger that, if approved, would leave 
one company providing satellite radio service. 

Numbers of Media Outlets and Owners Generally Increase with Market 
Size, Although Operating Agreements May Reduce the Effective Number of 
Independent Outlets: 

Markets with large populations have more television, radio, and 
newspaper outlets than less populated markets. In the top three 
markets--New York, Los Angeles, and Chicago--the combination of large 
populations and relatively high disposable income helps produce 
substantial advertising revenues for the media outlets in these 
markets. Hence, these markets have more television and radio stations 
and more newspapers than other markets. Alternatively, the small 
markets we analyzed--such as Jackson, Tennessee, and Harrisonburg, 
Virginia--are characterized by significantly fewer media outlets than 
larger markets. In more diverse markets, we also observed more radio 
and television stations and newspapers operating in languages other 
than English, which contributed to a greater number of outlets. For 
example, the Miami/Fort Lauderdale, Florida, market has more television 
stations than the other large, case study markets[Footnote 16] we 
studied because of the large number of Spanish language outlets. In 
addition, the Tucson, Arizona, market, which has a relatively large 
Hispanic population, has more television and radio stations than other 
similarly sized case study markets due to the presence of Spanish 
language television and radio stations. Table 2 illustrates the number 
of media outlets and owners in our case study markets. While we focused 
on media outlets located in specific markets, residents may, in some 
instances, be able to receive television and radio signals from 
stations located in adjacent markets. 

Table 1: Number of Media Outlets and Owners in Case Study Markets: 

Case study market Name (DMA rank): New York, New York (1); 
Television stations: Outlets: 21; 
Television stations: Owners: 15; 
Radio stations: Outlets: 73; 
Radio stations: Owners: 44; 
Daily newspapers: Outlets: 5; 
Daily newspapers: Owners: 5. 

Case study market Name (DMA rank): Los Angeles, California (2); 
Television stations: Outlets: 24; 
Television stations: Owners: 19; 
Radio stations: Outlets: 69; 
Radio stations: Owners: 34; 
Daily newspapers: Outlets: 2; 
Daily newspapers: Owners: 2. 

Case study market Name (DMA rank): Chicago, Illinois (3); 
Television stations: Outlets: 16; 
Television stations: Owners: 13; 
Radio stations: Outlets: 65; 
Radio stations: Owners: 38; 
Daily newspapers: Outlets: 3; 
Daily newspapers: Owners: 3. 

Case study market Name (DMA rank): Miami, Florida (16); 
Television stations: Outlets: 16; 
Television stations: Owners: 13; 
Radio stations: Outlets: 47; 
Radio stations: Owners: 24; 
Daily newspapers: Outlets: 3; 
Daily newspapers: Owners: 2. 

Case study market Name (DMA rank): Charlotte, North Carolina (26); 
Television stations: Outlets: 12; 
Television stations: Owners: 9; 
Radio stations: Outlets: 37; 
Radio stations: Owners: 17; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Nashville, Tennessee (30); 
Television stations: Outlets: 12; 
Television stations: Owners: 11; 
Radio stations: Outlets: 52; 
Radio stations: Owners: 35; 
Daily newspapers: Outlets: 2; 
Daily newspapers: Owners: 2. 

Case study market Name (DMA rank): Scranton, Pennsylvania (53); 
Television stations: Outlets: 8; 
Television stations: Owners: 7; 
Radio stations: Outlets: 24; 
Radio stations: Owners: 14; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Tucson, Arizona (70); 
Television stations: Outlets: 11; 
Television stations: Owners: 8; 
Radio stations: Outlets: 38; 
Radio stations: Owners: 17; 
Daily newspapers: Outlets: 2; 
Daily newspapers: Owners: 2. 

Case study market Name (DMA rank): Springfield, Missouri (76); 
Television stations: Outlets: 6; 
Television stations: Owners: 6; 
Radio stations: Outlets: 26; 
Radio stations: Owners: 11; 
Daily newspapers: Outlets: 2; 
Daily newspapers: Owners: 2. 

Case study market Name (DMA rank): Chattanooga, Tennessee (86); 
Television stations: Outlets: 8; 
Television stations: Owners: 8; 
Radio stations: Outlets: 32; 
Radio stations: Owners: 20; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Cedar Rapids, Iowa (89); 
Television stations: Outlets: 9; 
Television stations: Owners: 8; 
Radio stations: Outlets: 25; 
Radio stations: Owners: 11; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Florence, South Carolina (105); 
Television stations: Outlets: 6; 
Television stations: Owners: 5; 
Radio stations: Outlets: 13; 
Radio stations: Owners: 6; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Terre Haute, Indiana (151); 
Television stations: Outlets: 5; 
Television stations: Owners: 5; 
Radio stations: Outlets: 18; 
Radio stations: Owners: 11; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Sherman, Texas (161); 
Television stations: Outlets: 2; 
Television stations: Owners: 2; 
Radio stations: Outlets: 23; 
Radio stations: Owners: 13; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Jackson, Tennessee (174); 
Television stations: Outlets: 3; 
Television stations: Owners: 3; 
Radio stations: Outlets: 21; 
Radio stations: Owners: 14; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Case study market Name (DMA rank): Harrisonburg, Virginia (181); 
Television stations: Outlets: 2; 
Television stations: Owners: 2; 
Radio stations: Outlets: 16; 
Radio stations: Owners: 7; 
Daily newspapers: Outlets: 1; 
Daily newspapers: Owners: 1. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[End of table] 

Some media companies participate in operating agreements that involve a 
partnership between two or more outlets. For example, some companies 
participate in agreements wherein one company produces content or sells 
advertising through its own outlets and another company's outlets. 
FCC's attribution rules--which seek to identify those interests in or 
relationships to licensees that have a realistic potential to affect 
the programming decisions of licensees or other core operating 
functions--apply to several types of operating agreements.[Footnote 17] 
In our 16 case study markets, we found these agreements in a variety of 
markets but not in the top 3 markets, suggesting that market size may 
influence the benefits that companies realize through such agreements. 
We found television stations participating in operating agreements in 
five markets--Nashville, Tennessee; Wilkes Barre/Scranton, 
Pennsylvania; Springfield, Missouri; Myrtle Beach/Florence, South 
Carolina; and Terre Haute, Indiana. We also found operating agreements 
between radio stations in Harrisonburg, Virginia, and Nashville, 
Tennessee; and in Tucson, Arizona, the two competing daily newspapers 
participate in a joint operating agreement.[Footnote 18] To some 
extent, these agreements may reduce the number of independent outlets. 
For example, in Wilkes Barre/Scranton, we identified eight television 
stations. However, one owner of two stations participated in an 
agreement with a third station and the remaining four television 
stations participated in two separate agreements--each agreement 
covering two stations. Thus, while there are eight television stations 
and seven owners in Wilkes Barre/Scranton, there are three loose 
commercial groupings in the market. This example suggests that the 
number of independently owned media outlets in a given market is not 
always a good indicator of how many independently produced local news 
or other programs are available in a market. 

Ownership of Broadcast Outlets by Women and Minorities Appears Limited, 
but Comprehensive Data Are Lacking: 

In 1998, FCC issued rules to collect data on the gender, race, and 
ethnicity of holders of broadcast licenses. FCC decided to collect 
these data via its Ownership Report for Commercial Broadcast Stations, 
or Form 323. FCC noted that it was appropriate to develop "precise 
information on minority and female ownership of mass media facilities" 
and "annual information on the state and progress of minority and 
female ownership," thereby positioning "both Congress and the 
Commission to assess the need for, and success of, programs to foster 
opportunities for minorities and females to own broadcast 
facilities."[Footnote 19] FCC began collecting these data in 1999 and 
the Form 323 is the only mechanism through which FCC collects 
information on the gender, race, and ethnicity of broadcast owners; FCC 
requires biennial filing of the Form 323. 

As FCC's only information source on owners' gender, race, and 
ethnicity, the Form 323 data potentially could be used to determine and 
periodically report on the level of women and minority broadcast 
ownership. However, we identified several weaknesses that limit the 
usefulness of the Form 323 data.[Footnote 20] 

* Filing exemptions. Sole proprietors, partnerships, and noncommercial 
stations are not required to file the Form 323.[Footnote 21] Since data 
from the Form 323 do not include stations owned by sole proprietors, 
partnerships, or noncommercial stations, it is not possible to use the 
Form 323 data to identify either the full universe of broadcast 
stations owned by women and minorities or the number of women and 
minority owners. FCC also does not require the filing of the Form 323 
for low-power stations. 

* Data quality procedures. According to FCC officials, FCC does not 
verify or periodically review the gender, race, and ethnicity data 
submitted via the Form 323. According to these officials, a staff 
person from FCC's Video Division reviews submitted Form 323s, and this 
staff person focuses on ensuring compliance with the commission's 
multiple ownership and citizen ownership rules. These officials told us 
that station owners were responsible for determining the accuracy of 
their Form 323 submissions. 

* Data storage and retrieval. Companies must file the Form 323 
electronically. However, FCC allows owners to provide attachments with 
their electronic filing of the Form 323. These attachments may include 
the gender, race, and ethnicity data. Since these data are not entered 
into the database, the data are unavailable for electronic query. 

While there are no reliable government data on ownership by women and 
minorities, ownership of broadcast outlets by these groups appears 
limited. According to the industry stakeholders and experts we 
interviewed, the level is limited, and recent studies generally support 
this conclusion. In a 2006 report, Free Press found that for full-power 
television stations, women and minority ownership was about 5 percent 
and 3 percent, respectively. Specifically, the report noted that women 
owned a majority stake in 67 of 1,349 full power commercial television 
stations and minorities owned 44 stations, 8 of which were owned by 1 
company. In another report, Free Press estimated that women owned 
approximately 629 of 10,506 (or 6 percent) of full-power radio stations 
and minorities owned 812 stations (or 8 percent) of full-power radio 
stations. Additionally, three reports commissioned by FCC as part of 
its media ownership proceeding found relatively limited levels of 
ownership of television and radio stations by women and minorities. 

Stakeholders' Opinions Varied on Modifications to Media Ownership 
Rules, but Business Stakeholders Were More Likely to Favor 
Deregulation: 

The stakeholders we interviewed seldom agreed on proposed modifications 
to media ownership rules. However, business stakeholders expressing 
opinions on these rules were more likely to report that the rules 
should be relaxed or repealed. In contrast, nonbusiness stakeholders 
who expressed opinions on the rules were more likely to report that the 
rules should be left in place or strengthened. Both business and 
nonbusiness stakeholders who expressed an opinion on a previously 
repealed tax certificate program supported either reinstating or 
expanding the program to encourage the sale of broadcast outlets to 
minorities. 

* National television ownership cap. The majority (65 of 102) of 
stakeholders expressed no opinion on this issue. Of the 37 who did 
express an opinion, 22 said the cap should be left as is or lowered, 
further restricting ownership, while 15 favored raising or repealing 
the cap. But these results differed for nonbusiness and business 
stakeholders. Whereas 11 of 15 nonbusiness stakeholders stated that the 
cap should be left as is or lowered, further restricting ownership, 11 
of 22 business stakeholders indicated that the cap should raised or 
repealed. 

* Local television and radio ownership limits. Stakeholders were fairly 
evenly divided on whether FCC should alter rules limiting the number of 
television and radio stations a single entity can own in a local 
market. Of the 50 stakeholders expressing an opinion on the matter, 27 
said the rule should be repealed and 23 said the rule should either be 
left as is or strengthened. However, opinions within stakeholder 
segments were more consistent. Fourteen of 19 nonbusiness stakeholders 
were in favor of strengthening or leaving the rules in place, while 22 
of 31 business stakeholders were in favor of repealing the regulation. 

* Newspaper-broadcast cross-ownership ban. Overall, stakeholders were 
fairly evenly divided on whether FCC should modify its current rule 
prohibiting cross-ownership of newspapers and television or radio 
stations in the same local area. Of the 50 stakeholders expressing an 
opinion on the matter, 27 reported that the rule should be repealed and 
23 said the rule should either be left as is or strengthened. However, 
among business and nonbusiness stakeholders interviewed, there were 
clear differences in opinion on this issue. Fourteen of 20 nonbusiness 
stakeholders were in favor of strengthening or leaving the rule in 
place. In contrast, 21 of 30 business stakeholders were in favor of 
repealing the regulation. For example, 13 of 14 stakeholders from 
multisector media companies stated the rule should be repealed. 

 Reinstitution of minority tax certificate program. Prior to its 
repeal by the Congress in 1995, the minority tax certificate program 
provided for the seller of a broadcast station to defer capital gains 
taxes on the sale if the station was sold to a minority-owned company. 
Of the 102 stakeholders interviewed, most (72) expressed no opinion as 
to whether the minority tax certificate program should be reinstated. 
However, among the 30 stakeholders who mentioned this issue, there was 
broad consensus in favor of reinstating some version of this program. 
Twenty-eight of these 30 stakeholders indicated that either the program 
should be reintroduced without changes or expanded, and 2 said the 
program was not needed and should not be reinstated. 

Agency Comments: 

We provided a draft of this report to FCC for its review and comment. 
FCC provided technical comments that we incorporated where appropriate. 
In addition, FCC noted that it has several items under consideration 
that could impact media ownership. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the Chairman of the Federal Communications Commission and interested 
congressional committees. We will also make copies available to others 
upon request. In addition, the report will be available at no charge on 
the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you have any questions about this report, please contact me at (202) 
512-2834 or heckerj@gao.gov. Individuals making key contributions to 
this report include Michael Clements (Assistant Director), Carl Barden, 
Matt Barranca, Steve Brown, Ted Burik, Elizabeth Eisenstadt, Brandon 
Haller, Madhav Panwar, Friendly Vang-Johnson, and Mindi Weisenbloom. 

Signed by: 

JayEtta Z. Hecker: 

Director, Physical Infrastructure Issues: 

[End of section] 

Footnotes: 

[1] Prometheus Radio Project v. FCC, 373 F.3d 372 (3rd Cir. 2004), 
cert. denied, 545 U.S. 1123 (2005). 

[2] According to Nielsen, a DMA consists of all counties whose largest 
viewing share is given to stations of the same market area. There are 
210 nonoverlapping DMAs that cover the entire continental United 
States, Hawaii, and parts of Alaska. 

[3] "Grade B" is an FCC-defined measure of signal strength pertaining 
to the availability of an over-the-air signal with a rooftop antenna. 

[4] There is no limit on the number of AM or FM radio stations that a 
single entity can own nationwide. 

[5] For purposes of this rule, a daily newspaper is defined as one 
published 4 or more days per week in English and circulated generally 
in the community of publication; the definition includes non-English 
newspapers if published in the primary language of the market. 

[6] Newspaper-broadcast combinations that predate imposition of this 
ban are permitted. Companies also may seek a waiver from FCC to permit 
a newspaper-broadcast combination. 

[7] For purposes of this rule, media voices include independently owned 
and operating full-power television stations, radio stations, daily 
newspapers with a circulation that exceeds 5 percent of the households 
in the DMA, one cable system if that system is generally available to 
households in the DMA, and independently owned out-of-market radio 
stations with a minimum share as reported by Arbitron. 

[8] See Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 
56, Section 202(h). 

[9] 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, Further Notice of Proposed 
Rulemaking, 21 FCC Rcd. 8834 (2006). 

[10] The Congress now requires FCC to review its broadcast media 
ownership rules every 4 years. 

[11] In addition to full-power television stations, there were 
approximately 568 Class A and 2,227 low-power television stations in 
2006. 

[12] In addition to full-power radio stations, there were approximately 
770 low-power FM stations in 2006. 

[13] For example, among the nonbroadcast networks with the most 
subscribers, CNN and TNT are affiliated with Time Warner, ESPN is 
affiliated with Disney, USA Network is affiliated with NBC-Universal, 
and Discovery Channel is affiliated with Cox. 

[14] These two separate companies are controlled by National 
Amusements, Inc. 

[15] In November 13, 2007, FCC granted, subject to conditions, Clear 
Channel's application to assign its television stations to Newport 
Television LLC, which is wholly owned by affiliates of Providence 
Equity Partners, Inc. 

[16] The other large media markets in our case study analysis are 
Charlotte, North Carolina; Nashville, Tennessee; and Wilkes Barre/ 
Scranton, Pennsylvania. 

[17] We did not review whether the agreements fell within the 
requirements of the attribution rules. 

[18] The Newspaper Preservation Act of 1970 allows various operating 
agreements in order "to preserve separate and independent editorial 
voices." 

[19] 1998 Biennial Regulatory Review--Streamlining of Mass Media 
Applications, Rules, and Processes; Policies and Rules Regarding 
Minority and Female Ownership of Mass Media Facilities; Report and 
Order, 13 FCC Rcd. 23056, 23096-23097 (1998). 

[20] For its media ownership proceeding, FCC commissioned three studies 
assessing the status of women and minority broadcast ownership. Each of 
the three studies explored the adequacy of FCC's Form 323 data records 
and found the aggregate data to be unreliable. 

[21] Noncommercial stations are required to file a Form 323-E. However, 
the Form 323-E does not collect data on gender, race, or ethnicity. 

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