Sec. 73.3555  Multiple ownership.

    (a)(1) Radio contour overlap rule. No license for an AM or FM 
broadcasting station shall be granted to any party (including all 
parties under common control) if the grant of such license will result 
in overlap of the principal community contour of that station and the 
principal community contour of any other broadcasting station directly 
or indirectly owned, operated, or controlled by the same party, except 
that such license may be granted in connection with a transfer or 
assignment from an existing party with such interests, or in the 
following circumstances:
    (i) In a radio market with 45 or more commercial radio stations, a 
party may own, operate, or control up to 8 commercial radio stations, 
not more than 5 of which are in the same service (AM or FM);
    (ii) In a radio market with between 30 and 44 (inclusive) commercial 
radio stations, a party may own, operate, or

[[Page 329]]

control up to 7 commercial radio stations, not more than 4 of which are 
in the same service (AM or FM);
    (iii) In a radio market with between 15 and 29 (inclusive) 
commercial radio stations, a party may own, operate, or control up to 6 
commercial radio stations, not more than 4 of which are in the same 
service (AM or FM); and
    (iv) In a radio market with 14 or fewer commercial radio stations, a 
party may own, operate, or control up to 5 commercial radio stations, 
not more than 3 of which are in the same service (AM or FM), except that 
a party may not own, operate, or control more than 50 percent of the 
stations in such market.
    (2) Overlap between two stations in different services is 
permissible if neither of those two stations overlaps a third station in 
the same service.
    (3) (i) Where the principal community contours of two radio stations 
overlap and a party (including all parties under common control) with an 
attributable ownership interest in one such station brokers more than 15 
percent of the broadcast time per week of the other such station, that 
party shall be treated as if it has an interest in the brokered station 
subject to the limitations set forth in paragraph (a)(1) of this 
section. This limitation shall apply regardless of the source of the 
brokered programming supplied by the party to the brokered station.
    (ii) Every time brokerage agreement of the type described in 
paragraph (a)(3)(i) of this section shall be undertaken only pursuant to 
a signed written agreement that shall contain a certification by the 
licensee or permittee of the brokered station verifying that it 
maintains ultimate control over the station's facilities, including 
specifically control over station finances, personnel and programming, 
and by the brokering station that the agreement complies with the 
provisions of paragraph (a) of this section.
    (4) For purposes of this paragraph (a):
    (i) The ``principal community contour'' for AM stations is the 
predicted or measured 5 mV/m groundwave contour computed in accordance 
with Sec. 73.183 or Sec. 73.186 and for FM stations is the predicted 
3.16 mV/m contour computed in accordance with Sec. 73.313.
    (ii) The number of stations in a radio market is the number of 
commercial stations whose principal community contours overlap, in whole 
or in part, with the principal community contours of the stations in 
question (i.e., the station for which an authorization is sought and any 
station in the same service that would be commonly owned whose principal 
community contour overlaps the principal community contour of that 
station). In addition, if the area of overlap between the stations in 
question is overlapped by the principal community contour of a commonly 
owned station or stations in a different service (AM or FM), the number 
of stations in the market includes stations whose principal community 
contours overlap the principal community contours of such commonly owned 
station or stations in a different service.
    (iii) ``Time brokerage'' is the sale by a licensee of discrete 
blocks of time to a ``broker'' that supplies the programming to fill 
that time and sells the commercial spot announcements in it.
    (b) Television contour overlap (duopoly) rule. No license for a TV 
broadcast station shall be granted to any party (including all parties 
under common control) if the grant of such license will result in 
overlap of the Grade B contour of that station (computed in accordance 
with Sec. 73.684) and the Grade B contour of any other TV broadcast 
station directly or indirectly owned, operated, or controlled by the 
same party.
    (c) One-to-a-market ownership rule. No license for an AM, FM or TV 
broadcast station shall be granted to any party (including all parties 
under common control) if such party directly or indirectly owns, 
operates or controls one or more such broadcast stations and the grant 
of such license will result in:
    (1) The predicted or measured 2 mV/m groundwave contour of an 
existing or proposed AM station, computed in accordance with Sec. 73.183 
or Sec. 73.186, encompassing the entire community of license of an 
existing or proposed TV broadcast station(s), or the Grade A contour(s) 
of the TV broadcast station(s), computed in accordance with Sec. 73.684, 
encompassing the entire community of license of the AM station; or
    (2) The predicted 1 mV/m contour of an existing or proposed FM 
station,

[[Page 330]]

computed in accordance with Sec. 73.313, encompassing the entire 
community of license of an existing or proposed TV broadcast station(s), 
or the Grade A contour(s) of the TV broadcast station(s), computed in 
accordance with Sec. 73.684, encompassing the entire community of 
license of the FM station.
    (d) Daily newspaper cross-ownership rule. No license for an AM, FM 
or TV broadcast station shall be granted to any party (including all 
parties under common control) if such party directly or indirectly owns, 
operates or controls a daily newspaper and the grant of such license 
will result in:
    (1) The predicted or measured 2 mV/m contour of an AM station, 
computed in accordance with Sec. 73.183 or Sec. 73.186, encompassing the 
entire community in which such newspaper is published; or
    (2) The predicted 1 mV/m contour for an FM station, computed in 
accordance with Sec. 73.313, encompassing the entire community in which 
such newspaper is published; or
    (3) The Grade A contour of a TV station, computed in accordance with 
Sec. 73.684, encompassing the entire community in which such newspaper 
is published.
    (e)(1) National television multiple ownership rule. No license for a 
commercial TV broadcast station shall be granted, transferred or 
assigned to any party (including all parties under common control) if 
the grant, transfer or assignment of such license would result in such 
party or any of its stockholders, partners, members, officers or 
directors, directly or indirectly, owning, operating or controlling, or 
having a cognizable interest in TV stations which have an aggregate 
national audience reach exceeding thirty-five (35) percent.
    (2) For purposes of this paragraph (e):
    (i) National audience reach means the total number of television 
households in the Arbitron Area of Dominant Influence (ADI) markets in 
which the relevant stations are located divided by the total national 
television households as measured by ADI data at the time of a grant, 
transfer or assignment of a license. For purposes of making this 
calculation, UHF television stations shall be attributed with 50 percent 
of the television households in their ADI market. Where the relevant 
application forms require a showing with respect to audience reach and 
the application relates to an area where Arbitron ADI market data are 
unavailable, then the applicant shall make a showing as to the number of 
television households in its market. Upon such a showing, the Commission 
shall make a determination as to the appropriate audience reach to be 
attributed to the applicant.
    (ii) TV broadcast station or TV station excludes stations which are 
primarily satellite operations.
    (f) This section is not applicable to noncommercial educational FM 
and noncommercial educational TV stations.

    Note 1: The word ``control'' as used herein is not limited to 
majority stock ownership, but includes actual working control in 
whatever manner exercised.

    Note 2: In applying the provisions of this section, ownership and 
other interests in broadcast licensees, cable television systems and 
daily newspapers will be attributed to their holders and deemed 
cognizable pursuant to the following criteria:

    (a) Except as otherwise provided herein, partnership and direct 
ownership interests and any voting stock interest amounting to 5% or 
more of the outstanding voting stock of a corporate broadcast licensee, 
cable television system or daily newspaper will be cognizable;
    (b) No minority voting stock interest will be cognizable if there is 
a single holder of more than 50% of the outstanding voting stock of the 
corporate broadcast licensee, cable television system or daily newspaper 
in which the minority interest is held;
    (c) Investment companies, as defined in 15 U.S.C. 80a-3, insurance 
companies and banks holding stock through their trust departments in 
trust accounts will be considered to have a cognizable interest only if 
they hold 10% or more of the outstanding voting stock of a corporate 
broadcast licensee, cable television system or daily newspaper, or if 
any of the officers or directors of the broadcast licensee, cable 
television system or daily newspaper are representatives of the 
investment company, insurance company or bank concerned. Holdings by a 
bank or insurance company will be aggregated if the bank or insurance 
company has any right to determine how the stock will be voted. Holdings 
by investment companies will be aggregated if under common management.
    (d) Attribution of ownership interests in a broadcast licensee, 
cable television system or daily newspaper that are held indirectly

[[Page 331]]

by any party through one or more intervening corporations will be 
determined by successive multiplication of the ownership percentages for 
each link in the vertical ownership chain and application of the 
relevant attribution benchmark to the resulting product, except that 
wherever the ownership percentage for any link in the chain exceeds 50%, 
it shall not be included for purposes of this multiplication. [For 
example, if A owns 10% of company X, which owns 60% of company Y, which 
owns 25% of ``Licensee,'' then X's interest in ``Licensee'' would be 25% 
(the same as Y's interest since X's interest in Y exceeds 50%), and A's 
interest in ``Licensee'' would be 2.5% (0.1 x 0.25). Under the 5% 
attribution benchmark, X's interest in ``Licensee'' would be cognizable, 
while A's interest would not be cognizable.]
    (e) Voting stock interests held in trust shall be attributed to any 
person who holds or shares the power to vote such stock, to any person 
who has the sole power to sell such stock, and to any person who has the 
right to revoke the trust at will or to replace the trustee at will. If 
the trustee has a familial, personal or extra-trust business 
relationship to the grantor or the beneficiary, the grantor or 
beneficiary, as appropriate, will be attributed with the stock interests 
held in trust. An otherwise qualified trust will be ineffective to 
insulate the grantor or beneficiary from attribution with the trust's 
assets unless all voting stock interests held by the grantor or 
beneficiary in the relevant broadcast licensee, cable television system 
or daily newspaper are subject to said trust.
    (f) Holders of non-voting stock shall not be attributed an interest 
in the issuing entity. Holders of debt and instruments such as warrants, 
convertible debentures, options or other non-voting interests with 
rights of conversion to voting interests shall not be attributed unless 
and until conversion is effected.
    (g)(1) A limited partnership interest shall be attributed to a 
limited partner unless that partner is not materially involved, directly 
or indirectly, in the management or operation of the media-related 
activities of the partnership and the licensee or system so certifies.
    (2) In order for a licensee or system to make the certification set 
forth in paragraph (g)(1) of this section, it must verify that the 
partnership agreement or certificate of limited partnership, with 
respect to the particular limited partner exempt from attribution, 
establishes that the exempt limited partner has no material involvement, 
directly or indirectly, in the management or operation of the media 
activities of the partnership. The criteria which would assume adequate 
insulation for purposes of this certification are described in the 
Memorandum Opinion and Order in MM Docket No. 83-46, FCC 85-252 
(released June 24, 1985), as modified on reconsideration in the 
Memorandum Opinion and Order in MM Docket No. 83-46, FCC 86-410 
(released November 28, 1986). Irrespective of the terms of the 
certificate of limited partnership or partnership agreement, however, no 
such certification shall be made if the individual or entity making the 
certification has actual knowledge of any material involvement of the 
limited partners in the management or operation of the media-related 
businesses of the partnership.
    (h) Officers and directors of a broadcast licensee, cable television 
system or daily newspaper are considered to have a cognizable interest 
in the entity with which they are so associated. If any such entity 
engages in businesses in addition to its primary business of 
broadcasting, cable television service or newspaper publication, it may 
request the Commission to waive attribution for any officer or director 
whose duties and responsibilities are wholly unrelated to its primary 
business. The officers and directors of a parent company of a broadcast 
licensee, cable television system or daily newspaper, with an 
attributable interest in any such subsidiary entity, shall be deemed to 
have a cognizable interest in the subsidiary unless the duties and 
responsibilities of the officer or director involved are wholly 
unrelated to the broadcast licensee, cable television system or daily 
newspaper subsidiary, and a statement properly documenting this fact is 
submitted to the Commission. [This statement may be included on the 
appropriate Ownership Report.] The officers and directors of a sister 
corporation of a broadcast licensee, cable television system or daily 
newspaper shall not be attributed with ownership of these entities by 
virtue of such status.
    (i) Discrete ownership interests will be aggregated in determining 
whether or not an interest is cognizable under this section. An 
individual or entity will be deemed to have a cognizable investment if:
    (1) The sum of the interests held by or through ``passive 
investors'' is equal to or exceeds 10 percent; or
    (2) The sum of the interests other than those held by or through 
``passive investors'' is equal to or exceeds 5 percent; or
    (3) The sum of the interests computed under paragraph (i)(1) of this 
section plus the sum of the interests computed under paragraph (i)(2) of 
this section is equal to or exceeds 10 percent.

    Note 3: In cases where record and beneficial ownership of voting 
stock is not identical (e.g., bank nominees holding stock as record 
owners for the benefit of mutual funds, brokerage houses holding stock 
in street names for the benefit of customers, investment advisors 
holding stock in their own names for the benefit of clients, and 
insurance companies holding stock), the party having the right to 
determine how the stock

[[Page 332]]

will be voted will be considered to own it for purposes of these rules.

    Note 4: Paragraphs (a) through (e) of this section will not be 
applied so as to require divestiture, by any licensee, of existing 
facilities, and will not apply to applications for increased power for 
Class C stations, to applications for assignment of license or transfer 
of control filed in accordance with Sec. 73.3540(f) or Sec. 73.3541(b), 
or to applications for assignment of license or transfer of control to 
heirs or legatees by will or intestacy if no new or increased overlap 
would be created between commonly owned, operated or controlled 
broadcast stations in the same service and if no new encompassment of 
Communities proscribed in paragraphs (c) and (d) of this section as to 
commonly owned, operated or controlled broadcast stations or daily 
newspaper would result. Said paragraphs will apply to all applications 
for new stations, to all other applications for assignment or transfer, 
and to all applications for major changes in existing stations except 
major changes that will result in overlap of contours of broadcast 
stations in the same service with each other no greater than already 
existing. (The resulting areas of overlap of contours of such broadcast 
stations with each other in such major change cases may consist partly 
or entirely of new terrain. However, if the population in the resulting 
areas substantially exceeds that in the previously existing overlap 
areas, the Commission will not grant the application if it finds that to 
do so would be against the public interest, convenience or necessity.) 
Commonly owned, operated or controlled broadcast stations with 
overlapping contours or with community-encompassing contours prohibited 
by this section may not be assigned or transferred to a single person, 
group or entity, except as provided above in this note and by 
Sec. 73.3555(a). If a commonly owned, operated or controlled broadcast 
station and daily newspaper fall within the encompassing proscription of 
this section, the station may not be assigned to a single person, group 
or entity if the newspaper is being simultaneously sold to such single 
person, group or entity.

    Note 5: Paragraphs (a) through (e) of this section will not be 
applied to cases involving television stations that are ``satellite'' 
operations. Such cases will be considered in accordance with the 
analysis set forth in the Report and Order in MM Docket No. 87-8, FCC 
91-182( released July 8, 1991), in order to determine whether common 
ownership, operation, or control of the stations in question would be in 
the public interest. An authorized and operating ``satellite'' 
television station, the Grade B contour of which overlaps that of a 
commonly owned, operated, or controlled ``non-satellite'' parent 
television broadcast station, or the Grade A contour of which completely 
encompasses the community of publication of a commonly owned, operated, 
or controlled daily newspaper, or the community of license of a commonly 
owned, operated, or controlled AM or FM broadcast station, or the 
community of license of which is completely encompassed by the 2 mV/m 
contour of such AM broadcast station or the 1 mV/m contour of such FM 
broadcast station, may subsequently become a ``non-satellite'' station 
under the circumstances described in the aforementioned Report and Order 
in MM Docket No. 87-8. However, such commonly owned, operated, or 
controlled ``non-satellite'' television stations and AM or FM stations 
with the aforementioned community encompassment, may not be transferred 
or assigned to a single person, group, or entity except as provided in 
Note 4 of this section. Nor shall any application for assignment or 
transfer concerning such ``non-satellite'' stations be granted if the 
assignment or transfer would be to the same person, group or entity to 
which the commonly owned, operated, or controlled newspaper is proposed 
to be transferred, except as provided in Note 4 of this section.

    Note 6: For the purposes of this section a daily newspaper is one 
which is published four or more days per week, which is in the English 
language and which is circulated generally in the community of 
publication. A college newspaper is not considered as being circulated 
generally.

    Note 7: The Commission will entertain requests to waive the 
restrictions of paragraph (c) of this section on a case-by-case basis. 
The Commission will look favorably upon waiver applications that meet 
either of the following two standards:

    (1) Those involving radio and television station combinations in the 
top 25 television markets where there will be at least 30 separately 
owned, operated and controlled broadcast licensees after the proposed 
combination, as determined by counting television licensees in the 
relevant ADI television market and radio licensees in the relevant 
television metropolitan market;
    (2) Those involving ``failed'' broadcast stations that have not been 
operated for a substantial period of time, e.g., four months, or that 
are involved in bankruptcy proceedings. For the purposes of determining 
the top 25 ADI television markets, the relevant ADI television market, 
and the relevant television metropolitan market for each prospective 
combination, we will use the most recent Arbitron Ratings Television ADI 
Market Guide. We will determine that number of radio stations in the 
relevant television metropolitan market and the number of television 
licensees within the relevant ADI television market based on the most 
recent Commission ownership records.

[[Page 333]]

    Other waiver requests will be evaluated on a more rigorous case-by-
case basis, as set forth in the Second Report and Order in MM Docket No. 
87-7, FCC 88-407, released February 23, 1989, and Memorandum Opinion and 
Order in MM Docket No. 87-7, FCC 89-256, released August 4, 1989.

    Note 8: Paragraph (a)(1) of this section will not apply to an 
application for an AM station license in the 535-1605 kHz band where 
grant of such application will result in the overlap of 5 mV/m 
groundwave contours of the proposed station and that of another AM 
station in the 535-1605 kHz band that is commonly owned, operated or 
controlled if the applicant shows that a significant reduction in 
interference to adjacent or co-channel stations would accompany such 
common ownership. Such AM overlap cases will be considered on a case-by-
case basis to determine whether common ownership, operation or control 
of the stations in question would be in the public interest. Applicants 
in such cases must submit a contingent application of the major or minor 
facilities change needed to achieve the interference reduction along 
with the application which seeks to create the 5 mV/m overlap situation.

    Note 9: Paragraph (a)(1) of this section will not apply to an 
application for an AM station license in the 1605-1705 kHz band where 
grant of such application will result in the overlap of the 5 mV/m 
groundwave contours of the proposed station and that of another AM 
station in the 535-1605 kHz band that is commonly owned, operated or 
controlled. Paragraphs (d)(1)(i) and (d)(1)(ii) of this section will not 
apply to an application for an AM station license in the 1605-1705 kHz 
band by an entity that owns, operates, controls or has a cognizable 
interest in AM radio stations in the 535-1605 kHz band.

    Note 10: Authority for joint ownership granted pursuant to Note 9 
will expire at 3 a.m. local time on the fifth anniversary for the date 
of issuance of a construction permit for an AM radio station in the 
1605-1705 kHz band.


[ 59 FR 49007 , Sept. 26, 1994, as amended at  59 FR 62613 , Dec. 6, 1994; 
 61 FR 10690  and 10692, Mar. 15, 1996]