Assignment of Broadcast Licenses Held by Subsidiaries of Chris-Craft Industries, Inc., to
Fox Television Stations, Inc.

Today the Commission approved the assignment of certain licenses from Chris Craft
Industries, Inc. to Fox Television Stations, Inc., finding the assignment to be in the public
interest. The Commission conditioned its approval on the divestiture of various assets in order
to bring the company into compliance with our broadcast ownership rules. I write separately to
highlight the basis upon which the Commission found the transaction to be in the public interest;
and, to challenge the suggestion by the minority that the Commission has somehow abandoned
its public interest obligation. To the contrary, today's decision affirms the fact that Commission
rules and long standing Commission precedent guide our public interest deliberations.

I. THE PUBLIC INTEREST STANDARD

The Commission is required to examine a license transfer (often in the context of a
merger) and must affirmatively find that the transfer is in the public interest. (1)

In the context of mass media transactions, the Commission's analysis is simplified by the
extensive structural ownership rules Congress and the Commission have promulgated. The
benefits of these prophylactic rules arethat they are clear and provide some certainty to
marketplace participants. They have the additional benefit of administrative efficiency in
reviewing combinations.

The extensive rulemaking proceedings used to develop the broadcast ownership rules
take full account of the Commission's diversity goals and concentration concerns. These rules
squarely embody the Commission's public interest goals of limiting the effect of market power
and promoting diversity of viewpoints in the market. (2) A transaction that complies with
structural rules designed to advance the public interest (when they exist), should not be subject
to further ad hoc review; otherwise the exalted benefits of such rules would be eviscerated.

In other areas, Congress and the Commission have not set out strict structural rules. As a
result, the Commission reviews these transactions in a more case specific manner. This is the
case with telephone mergers. In this area there are no rules on the number of lines or central
offices that a company may own. As a result, the Commission developed a four-prong test to
guide its review in such cases. The analytical framework suggested by the minority would have
the Commission overlay this four-prong test, or some other equally ambiguous standard, on top
of our structural rules, to determine if the transaction would "otherwise serve the public
interest." I fail to see the wisdom of this redundancy, applying two bodies of law designed to
achieve the same basic objectives.

II. PUBLIC INTEREST FINDINGS

This transaction contravenes three of the Commission's broadcast ownership rules; the
national ownership cap, (3) the local television multiple ownership rule, (4) and the
television/newspaper cross-ownership rule. (5) The Commission specifically conditioned its
approval on the licensee's compliance with these rules. Consistent with long-standing
Commission precedent, the Order gives the licensee a reasonable amount of time to divest assets
in order to comply with our rules. In so doing, the Order conducts a public interest test under
each rule; weighing the request for a temporary waiver against our underlying goals of diversity
and competition in the broadcast marketplace. (6)

For example, with regard to the national ownership cap, the Order finds; "The
Commission has consistently determined that in multiple station transactions the overall benefits
of allowing time for an orderly transition will outweigh any temporary impact on diversity and
competition from common ownership during a reasonable period following grant of the
application." (7) The Order further notes that "given the size of the proposed transaction, the
practical difficulties of divesting the necessary stations, and our policy of avoiding forced sales,
… the advantages of granting a … temporary waiver … will outweigh any temporary impact on
diversity and competition and is in the public interest." (8) In regard to the duopoly in Salt Lake
City, the fact that ten independent commercial and non commercial stations and 30 broadcast
media voices will remain in the market post merger, provided a basis for the Order to find that a
six month waiver from the duopoly rule would not "disserve the public interest." Furthermore,
in granting the temporary waiver of the television/newspaper cross-ownership rule, the Order
points out that the New York market would still have 19 independent TV voices, over 120
commercial and noncommercial radio stations, 25 daily newspapers and hundreds of weekly
papers. (9)

Given these findings, one is left wondering why the minority so mischaracterizes the
Order's grant of compliance periods as somehow constituting "permanent waivers of the
Commission's rules." As is highlighted above, granting parties a reasonable period of time for
divestiture of assets to satisfy our rules is a long-standing and well-settled Commission principle.
See Shareholders of CBS Corporation,15 FCC Rcd 8230, 8236 (2000) (Commission grants 12
months for company to comply with the national ownership cap); AT&T/MediaOne, 15FCC
Rcd 9816 (2000) (Commission grants slightly under 12 months for company to divest assets to
comply with the cable horizontal ownership cap). The Commission is not unique in this regard.
In its antitrust review of mergers, the Department of Justice and the Federal Trade Commission
typically provide parties with a reasonable amount of time for divestiture in order to come into
compliance with the antitrust statutes. I find it fantastic that the minority would characterize
these divestiture periods as deviations from our rules in order to approve the transaction.

III.FOREIGN OWNERSHIP

The Commission takes seriously the statutory limits placed on certain transactions.
Under Section 310(b)(4) of the Communications Act, Congress prohibits the grant of a license to
"any corporation directly or indirectly controlled by any other corporation of which more than
one fourth of the capital stock is owned of record or voted by aliens … or by any corporation
organized under the laws of a foreign country, if the Commission finds that the public interest
will be served by the revocation or refusal of such license." (10)

In 1995, the Commission, pursuant to the requirements of Section 310(b)(4), found that,
although News Corp.'s interest in Twentieth Holdings Corporation (the parent of Fox Television
Stations ("FTS" or "Fox")) exceeded the 25% benchmark established in Section 310(b)(4), the
ownership structure was in the public interest. (11) The Commission also held that, "it would
disserve the public interest to confine our decision to stations FTS already owns, for doing so
would unnecessarily hinder the company's ability to expand and frustrate its reasonable
expectations for doing so." (12) The Commission concluded that, "FTS, as presently structured
may, consistent with the public interest, acquire additional broadcast stations." (13) As the Order
discusses in detail, the corporate structure present here is consistent with our previous Fox
decision. (14) The claim that News Corp/Newco,rather than FTS, controls the stations is simply
not consistent with Commission precedent.

The Commission's analysis of the station's locus of control generally rests on three
factors; programming, personnel and finances. FTS will have the ultimate control and decision
making authority in each of these three areas: all of its programming activities are subject to the
approval and control of FTS; the general manager and all of the department heads of each station
report to FTS; and FTS controls the budget process. (15) The Office of General Counsel and the
Mass Media Bureau found that the proposed ownership structure complies with the
Commission's 1995 Fox decision; thereby concluding that no additional public interest analysis
is necessary under Section 310(b)(4). I have the highest confidence in the independent legal
analysis and judgment of the Commission staff in reaching this conclusion.

The minority's strained effort to distinguish the corporate structure presented in this
transaction from the prior Fox decision is not persuasive. By elevating "form over substance,"
the minority essentially presents the Commission with two alternatives. We could undo the 1995
Fox decision, that created for the first time in the history of television, a competitive fourth
network that provides a uniquely diverse voice in American political discourse; or turn the clock
back to 1995 and freeze the company forever as it existed at that time in an environment in
which its competitors are not similarly restrained. One is left to wonder why anyone who places
a high value on diversity of voices and competition in the media marketplace would find either
result serves the public interest.

IV. CONCLUSION

In short, where there are clearly applicable structural rules, reflecting the Commission's
or Congress' diversity and concentration judgments, I believe a license transfer to be in the
public interest if the parties satisfy the rule. As is the case here, in multiple-station, multiple
market transactions, it is common for the combined entity to create temporary violations of our
ownership rules. Consistent with Commission precedent, however, the Order balances the grant
of a compliance period, against any potential harm to the goals underlying the rule. Beyond this
detailed analysis, engaging in an additional, more subjective, evaluation using some ambiguous
standard is unnecessarily complex and redundant. This additional burden places more weight on
a review process that is already laboring under the demands of a fast-paced, innovation-driven
marketplace.

Finally, on behalf of the agency, I feel compelled to address Commissioner Tristani's
assertion that; "the decision also shows the lengths the Commission will go to avoid standing in
the way of media mergers." While we may have a respectful disagreement over the public
interest standard and the rote application of the four-prong test in license transfers, this sweeping
assertion is not only offensive, but absurd. If the majority was on the crusade she suggests, then
the Commission would have granted permanent waivers of our rules, which it clearly did not.

1. Section 310(d) of the Communications Act provides, in pertinent part, that the Commission may only grant a
proposed license transfer if it determines that "the public interest, convenience, and necessity will be served
thereby." 47 U.S.C. § 310(d).