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FCC fills the skies with red flags

The FCC has thrown its red flag on all of one deal and portions of another, slamming on the brakes for clusters in five different markets.

Three of the clusters in the deal sending stations of Root Communications to Quantum Communications (3/5 RBR Daily Epaper #45) were hit. They include a three-AM, five-FM cluster in the Florence SC area, a two-AM, four-FM cluster in the Brunswick GA area and a two-FM duopoly in the Fort Walton Beach area.

The other flagged transaction is both sides of the swap/cash deal between Regent Communications (O:RGCI) and Clear Channel (N:CCU) (2/28 RBR Daily Epaper #42). The stations going to Regent are an AM and four FMs in the dual Aribtron market area including Evansville IN and Owensboro KY. The Clear Channel-bound stations are in a one-AM, three FM cluster in Duluth MN.

RBR Observation:

The FCC's flags are once again for the most part fairly ridiculous, since we're talking about clusters which the FCC itself has already approved. It is just crazy to take an intact cluster and throwing it back into the pot for re-evaluation just because it was sold.

Then we get the sublimely ridiculous red-flag in Fort Walton Beach. If you can't have two FMs together, what can you have? The Clear Channel Duluth property is also pretty small by superduopoly standards.

The only possible area of concern for the FCC is the in the Evansville-Owensboro area. Regent is adding the Clear Channel stations to an AM and two FMs it bought earlier from Brill Media (8/26/02 RBR Daily Epaper #36). Even there, it'll have two AMs and six FMs, but they're spread out over two markets. We feel confident that Regent is well aware of the law and would not have entered into the Clear Channel deal if it was not within its bounds.

Anyway, it is a new cluster, so the FCC at least has some grounds for the Evansville/Owensboro flags. The other four, already-approved clusters should be allowed to change hands without further scrutiny.