APR 13, 1999 

CUMULUS MEDIA EXECUTIVE CHAIRMAN TESTIFIED BEFORE SENATE, Panel Asking FCC to Speed Up License Transfer Process

WASHINGTON, April 13, 1999 -- Cumulus Media Inc. Executive Chairman Richard W. Weening told a Senate panel today that “long and uncertain regulatory delays” by the Federal Communications Commission are frustrating the 1996 Telecommunications Act’s intent to strengthen investment, management, and competition in local radio markets.

Weening spoke before the Senate Judiciary Subcommittee on Antitrust on behalf of Cumulus, a Milwaukee-based radio broadcasting company, and the National Association of Broadcasters.  He urged the panel to strengthen legislation introduced by Subcommittee Chairman Sen. Mike DeWine (R-Ohio) and Ranking Minority Member Sen. Herb Kohl (D-Wisconsin).  The DeWine-Kohl legislation, The Antitrust Merger Review Act (S. 467) would require the FCC to approve or deny license transfers within 180 days after receiving requested documents for investigation.  The FCC would be required to approve or deny transfers within 30 days in instances when it does not request documents for investigation.

The NAB praised the intent of this legislation and asked Congress to strengthen it by extending its coverage to transactions smaller than the Hart-Scott-Rodino Act’s threshold for antitrust review, including the purchase of radio stations in small and mid-sized markets, Cumulus’ primary focus.

Weening commended the FCC for processing most applications within 90 days but expressed concern about  FCC delays often exceeding a year when one or more Commissioners has a concern about market concentration and withholds approval for acquisitions clearly permitted by the 1996 Telecommunications Act.  “The Act already specifies the number of radio stations that could be owned in any one market, and thus that the FCC does not have a proper role to play in formulating a different policy,” he said.  “When the FCC begins to decide, on a case-by-case basis, that particular applications will not be approved on the ground that the number of stations results in too much market concentration, the FCC is second-guessing the policy judgment that Congress already has made.  We do not think the FCC’s authority to implement the ‘public interest’ standard allows the Commission to substitute its judgment for that of Congress on a subject specifically dealt with in the statute.”

He cited several examples of harmful regulatory delays:

• The FCC delayed approval of license transfers for 13 months in Cumulus’ acquisition of several small stations in Florence, S.C.
• In another community, the FCC has not acted upon transfer applications Cumulus filed in February 1998.  “There appears to be no clear end in sight, some 14 months after the parties agreed to this transaction,” Weening said.
• The FCC is holding up transfer to Cumulus of a small AM station that is “poorly operated out of dilapidated facilities and is fraught with technical problems, including a collapsed tower.  By preventing Cumulus from using its resources to upgrade, promote and effectively program the station, the Commission is going against its objective of enhancing service to listeners by leading the station to further deterioration.”

Cumulus Media, Inc., began acquiring radio stations in small and mid-sized markets (ranked No. 75 or smaller by Arbitron) in 1997.  The company now owns or is in the process of acquiring 232 stations in 44 cities.

“The Cumulus strategy is exactly what the Telecom Act envisions,” Weening said.  “We acquire independently-owned radio stations and combine them into a cluster to share infrastructure resources such as engineering, accounting, physical facilities and the like.  This allows us to cut operating costs anywhere from 10% to 20%.

“We then shift a significant portion of the cost savings to improving programming with live on-air talent and substantially upgrading and expanding the sales organization.  We employ sophisticated research techniques to insure that each station is delivering the product the listeners want.   We brand each station as a separate entity.  Each station has its own programming director to manage the product and its own sales manager to coordinate the sales team.  Because of economies of scale, we have access to the capital markets to pay for these improvements.  The result is a revitalized group of stations capable of increasing market share against newspaper, television, and other media by delivering more choice to advertisers and a better product to listeners.”

Cumulus Media Inc. is a radio broadcasting company focused on the acquisition, operation, and development of radio stations in mid-sized and smaller U.S. cities.
 

Contact:  Richard Weening, 414-615-2800 
 

RETURN TO TOP
 

©1998 Cumulus Media Inc. All rights reserved.