[00:00:02] Speaker 00:
Case number 14-1131, ADX Communications of Pentecola at L, Appellants vs. Federal Communications Commission.

[00:00:10] Speaker 00:
Ms.

[00:00:11] Speaker 00:
Alpert for the Appellants, Mr. Carr for the Appellee.

[00:00:43] Speaker 02:
Good morning.

[00:00:45] Speaker 03:
Good morning, Your Honors.

[00:00:46] Speaker 03:
I'm Dan Albert on behalf of ADS Communications of Pensacola and ADS Communications of Escambia.

[00:00:52] Speaker 03:
This case involves a fairly outrageous situation that resulted from an FCC ruling whereby basically a number of radio stations owned by a competitor all are allowed to

[00:01:02] Speaker 03:
be co-located, nearly co-located, and as a result, but nevertheless, the FCC is determining that certain of these stations are in one market area, other stations are in the other market area.

[00:01:16] Speaker 03:
When you consider all these stations in the same market, it would be over the FCC's multiple ownership limits.

[00:01:22] Speaker 03:
The FCC's multiple ownership limit consists of eight radio stations overall in the largest markets, five stations of which can be in the same service, such as an AM or FM station.

[00:01:32] Speaker 03:
In this case here, if you can imagine it, there's a tower, for example, in which broadcast stations operate from the same antenna.

[00:01:38] Speaker 03:
As far as the FCC is concerned, even though three of the stations are located on that same tower, they're not in the same market, they don't serve the same audience.

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It's a total fiction at this point.

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The same thing with other nearby stations.

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There are other stations nearby, only two miles away or 12 miles away.

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You have the FCC, because they're relying upon Arbitron as a determining factor here in determining where the markets are located.

[00:02:01] Speaker 05:
You agree that under the Arbitron standards, they're in different markets, right?

[00:02:05] Speaker 03:
Excuse me, sir?

[00:02:07] Speaker 05:
You agree that under the Arbitron standards, they're in different markets.

[00:02:11] Speaker 03:
Well, the FCC applied the Arbitron standards.

[00:02:13] Speaker 05:
Yeah, and you don't challenge, but if that's correct, they are in different markets, correct?

[00:02:18] Speaker 03:
Well, they're not intended to be the forever arbiter of what markets stations are the same with.

[00:02:24] Speaker 05:
I'm just asking you that if the Arbitron standard is properly applied, then there's no problem here, correct?

[00:02:30] Speaker 05:
Your whole argument is that the Commission shouldn't have applied the Arbitron standard.

[00:02:34] Speaker 03:
In this particular case, yes, because they provide exceptions to the rule.

[00:02:37] Speaker 03:
That's correct, sir.

[00:02:38] Speaker 05:
So you have to win.

[00:02:39] Speaker 05:
You have to convince us that the agency's decision here to apply Arbitron was somehow arbitrary and capricious.

[00:02:50] Speaker 05:
That's what you have to check.

[00:02:51] Speaker 05:
That's correct, Your Honor.

[00:02:52] Speaker ?:
OK.

[00:02:53] Speaker 05:
So, and as I understand it, your main argument is that they shouldn't have applied Arbitron because in this particular urban area, this particular area, the Arbitron markets are too close and this is really only one market, right?

[00:03:12] Speaker 03:
That's mostly right, Your Honor.

[00:03:14] Speaker 05:
That's your argument, but... For many of the stations that don't necessarily are not necessarily high-powered stations, they don't necessarily... But the Commission, when the Commission issued the arbitrary standard, it acknowledged that there are a lot of media markets that are just like that.

[00:03:25] Speaker 03:
And yes, they did, Your Honor.

[00:03:27] Speaker 03:
And because of that, they recognized the fact that parties should have to write the power of the Commission to deny, bring those specific situations to the Commission detention, so it can resolve the situation properly in those situations.

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it's not necessarily a one-size-fits-all sort of solution that the FCC adopted.

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It recognizes the fact that the arbitrage

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solution would satisfy the vast majority of cases, but they recognize the fact that it would not necessarily satisfy all cases.

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In fact, they recognize the fact that contour methodology is more accurate than merely geographic designation, and they also recognize the fact that in certain cases that arbitron as a standard is subject to manipulation.

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In no other market has there been a situation where so many powerful stations are owned by one party, all located within the same county, and yet they are considered to be some in one market, some in another market, and are claimed not to be in true competition with each other.

[00:04:28] Speaker 03:
And that's the crux of the situation here that's problematic.

[00:04:32] Speaker 02:
So you say that the commission failed to take a hard look at these facts and circumstances.

[00:04:39] Speaker 03:
That's correct, Your Honor.

[00:04:41] Speaker 02:
Yet the record shows that the Commission did take into account these circumstances and just reached a different conclusion based on its analysis as to why it was going to stick with the arbitron rather than the contour methodology.

[00:04:59] Speaker 03:
Well, he never looked at the contour methodology.

[00:05:00] Speaker 03:
All he did was really look at arbitrage, and all he did basically is say that there were additional stations in the market, so therefore it's not like the cumulus stations in this case were the only stations that were in play here whatsoever, which isn't really the standard they should be applying.

[00:05:15] Speaker 03:
They should be looking at whether or not there's meaningful competition between these stations where they all serve the same service area, and as a result, whether or not the stations exceed the multiple ownership limits.

[00:05:29] Speaker 01:
Are there no other situations in which you have what would be classified as adjacent arbitron markets where you have signals that overlap?

[00:05:40] Speaker 03:
There probably are other situations where they overlap but not where they're owned by the same party.

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In this case here cumulus owns six stations which puts them automatically over the five limit by virtue of

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the market size will be created if you look at a combined market source situation.

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The more important thing is that if there are situations where such a thing exists, it's never been litigated.

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So I'd say in any of those situations, we're not the absolutely only case that might ever be litigated.

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I'm not saying that whatsoever.

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But parties should have the right to bring up that to the FCC and say, people are struggling with two different markets.

[00:06:12] Speaker 03:
For example, if you look at Washington, D.C.

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and Baltimore, those are adjacent markets.

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If I say, if you look at the market configuration of stations, there are states that serve DC, there are states that serve Baltimore.

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There's no one that has a powerful enough station that somehow they could serve both areas, or for that matter, own six stations that serve really both markets.

[00:06:31] Speaker 03:
There are clearly defined markets and there's clearly defined geography situations such that they basically are properly parceled between two separate markets.

[00:06:40] Speaker 02:
So the commission said that there will still be 10 different owners.

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in each of these markets.

[00:06:49] Speaker 03:
That's correct, Your Honor.

[00:06:50] Speaker 03:
That's what the FCC said.

[00:06:51] Speaker 03:
However, that's not the test that's supposed to be applied by the FCC.

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What's supposed to be applied is not an antitrust test.

[00:06:59] Speaker 03:
It's whether or not you exceed the multiple ownership limits.

[00:07:01] Speaker 03:
So in other words, there are plenty of markets.

[00:07:03] Speaker 02:
All right, but you agree that they are in different markets.

[00:07:07] Speaker 02:
You agree, I gather, that the Commission found that there are 10 owners

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in each of these markets?

[00:07:19] Speaker 03:
Sir, fragments of each of the two markets, yes.

[00:07:22] Speaker 05:
But I don't agree that these stations are truly... What did you just say?

[00:07:25] Speaker 05:
I didn't hear your word.

[00:07:26] Speaker 03:
I agree that there are other states that serve fragments of each of the two markets.

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In other words, if you're talking about a market here and a market here, these stations exist in the middle.

[00:07:36] Speaker 03:
There are some stations that exist and serve this market here.

[00:07:39] Speaker 03:
There are some stations that exist and serve only this market here.

[00:07:42] Speaker 03:
They are not truly, those stations wouldn't necessarily be competitive with the main stations, but the main fee test is whether or not these stations serve both markets in a meaningful fashion so that they really should be considered together rather than pretending as though they serve one market or another market.

[00:07:58] Speaker 03:
It's not like there's an iron curtain that's somehow another because the station

[00:08:03] Speaker 03:
is designated as Pensacola Market that somehow or another you can't hear it in mobile and the same station located on the same tower at the same height is just because its designation is mobile that somehow or another it's only competing in mobile.

[00:08:16] Speaker 03:
They're all competing together because of the geography and placement of the stations.

[00:08:22] Speaker 03:
That's really the crux of the problem here for all intents and purposes.

[00:08:25] Speaker 03:
The commission is trying to create a fiction here and they're trying to ignore the reality of the situation when we laid out for them, in fact you can see the map if you haven't already on page 14 of the brief, which shows these stations all are in competition with each other.

[00:08:40] Speaker 02:
these however but the commission has adopted this approach all right we disagree in this instance and all i'm getting at is your brief saying they failed to take a hard look at the facts and circumstances so that's why i was going over the facts and circumstances they did look at them didn't they

[00:09:01] Speaker 03:
I don't think they really, there's no place in the commission's decision where they ever looked at or suggested that they looked at the fact or conceded the fact that even though these stations do overlap and do provide service to each other and are in competition, that somehow or another, that nevertheless the arbitrary rules should apply.

[00:09:18] Speaker 03:
There's no explanation like that whatsoever.

[00:09:20] Speaker 03:
from everything that's within the brief whatsoever, it's like they ignored that fact.

[00:09:24] Speaker 03:
They said, Arbitron controls, therefore we're going to apply it.

[00:09:26] Speaker 03:
They comply with Arbitron, therefore we're going to apply it.

[00:09:29] Speaker 03:
They never gave any serious look whatsoever to the idea that, well, maybe this is an unusual case.

[00:09:35] Speaker 03:
Maybe this should be... They said it wasn't.

[00:09:38] Speaker 02:
The Commission said it was not an unusual case or, as you argued, a unique situation.

[00:09:45] Speaker 03:
Yeah, the only basis on which they said this is not unusual, they say there are other adjacent markets.

[00:09:49] Speaker 03:
We're not claiming there aren't other adjacent markets.

[00:09:52] Speaker 03:
We're claiming there's no other situation that's been presented to the commission so far, whereby one owner has taken advantage of the adjacent market situation, situated their station, so they realistically serve both markets.

[00:10:04] Speaker 03:
And as a result, the arbitrary rule should not apply.

[00:10:07] Speaker 03:
It's the facts that count, not simply the fact that there's adjacent markets or anything like that.

[00:10:13] Speaker 05:
The Commission says that, in its brief, that you lack standing to challenge the two-year waiting period thing, and you didn't respond to that in your reply brief.

[00:10:22] Speaker 05:
Are you conceding that point?

[00:10:25] Speaker 03:
I'm not conceding the point, Your Honor.

[00:10:26] Speaker 03:
I believe that there has been an abuse and manipulation of the multiple ownership rules here and such that... Wait, wait.

[00:10:32] Speaker 05:
They're saying you don't have standing to challenge it.

[00:10:35] Speaker 03:
But at that one point, they're claiming we don't have standing.

[00:10:38] Speaker 05:
Not entirely, but... No, I said, with respect to the two-year waiting period.

[00:10:41] Speaker 03:
Yes, that's correct.

[00:10:41] Speaker 05:
Okay, so do you agree with the commission?

[00:10:44] Speaker 03:
We don't have standing, no, I do not agree with the commission.

[00:10:46] Speaker 02:
As to the two-year period... Yeah, just the two-year period.

[00:10:48] Speaker 03:
I do not agree with the commission.

[00:10:49] Speaker 02:
Because you didn't respond in the brief.

[00:10:51] Speaker 02:
And why, yes, you had no response in your reply brief.

[00:10:53] Speaker 03:
I think I did give a response.

[00:10:55] Speaker 03:
I think the court can remand us to the Commission, nevertheless, with regard to it.

[00:10:59] Speaker 03:
We brought the case on a timely basis.

[00:11:01] Speaker 02:
No, the Commission says you didn't file your appeal until after the two-year period had expired.

[00:11:08] Speaker 03:
Well, there was no period of time before that that we could have filed the appeal, of course.

[00:11:14] Speaker 05:
What would be the remedy here?

[00:11:20] Speaker 05:
Let's assume we agree with you that the two-year period has now expired.

[00:11:25] Speaker 03:
Well, if the two-year rule even applied to begin with, then we're in a situation where the commission is basically conceding the fact that there was a manipulation that occurred because of the city of license change that occurred.

[00:11:39] Speaker 02:
There was a manipulation because I lost the last part of your sentence.

[00:11:46] Speaker 03:
Yes, there was one station that was outside the license to a city of license within one of the Arbatron areas.

[00:11:54] Speaker 03:
An application was filed for a nominal city of license change.

[00:11:58] Speaker 03:
And that basically, even though the station did not change location whatsoever, stayed in the exact same location at the same power and everything, suddenly they just called themselves a different city.

[00:12:06] Speaker 03:
And that's the thing which got them in the door to not enable them to use only the arbitrary rule for analysis.

[00:12:12] Speaker 03:
Before that, they would have had to use this contour overlap.

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and it wouldn't have been able to comply.

[00:12:19] Speaker 03:
Which actually gets back to an important point, which hasn't been made yet, is the whole idea that how is something where a certain cluster of stations, not in the public interest on day one, suddenly is in the public interest on day two, just because of a reclassification of a city license, but no change of facilities whatsoever.

[00:12:37] Speaker 01:
Can I just make your standing argument for a second?

[00:12:40] Speaker 01:
I thought your argument was this, that

[00:12:43] Speaker 01:
There's a rule that says, and we assume that rule to be applicable here for purposes of standing.

[00:12:48] Speaker 01:
The FCC has a response on the merits.

[00:12:49] Speaker 01:
But for purposes of standing, we assume a rule to exist that says that if you seek a change to the Arbitron methodology, you can't then apply for a license within a two-year period.

[00:12:59] Speaker 01:
And then what happened here is somebody sought a license within a two-year period.

[00:13:05] Speaker 01:
And so then the question becomes, well, more than two years have already left, so how would that give you any relief?

[00:13:12] Speaker 01:
To which your response I take it would be, well, what we're saying is the rule was violated because someone applied for a license within the two years, so you vacate the decision.

[00:13:20] Speaker 01:
And then, yeah, the same thing might happen again.

[00:13:23] Speaker 01:
might reapply after two years and the FCC might approve it again, but you have to go through that exercise.

[00:13:27] Speaker 03:
That's correct.

[00:13:28] Speaker 03:
That's basically FCC's policy.

[00:13:30] Speaker 03:
That's correct.

[00:13:31] Speaker 01:
And so your argument is if you assume that, contrary to the FCC's determination on the merits, if you assume that this two-year rule does apply to this situation, the consequence of a breach of the two-year rule by the applicant is that then the FCC's decision gets vacated.

[00:13:46] Speaker 03:
That's correct.

[00:13:47] Speaker 03:
The FCC's original decision was erroneous in that respect.

[00:13:49] Speaker 03:
That's correct, Your Honor.

[00:13:51] Speaker 03:
Okay.

[00:13:51] Speaker 03:
I see I'm out of time.

[00:13:52] Speaker 03:
I'd like to have a moment to respond.

[00:13:55] Speaker 03:
All right.

[00:13:56] Speaker 03:
Thank you.

[00:14:03] Speaker 02:
Council for respondent.

[00:14:10] Speaker 06:
Good morning, your honors.

[00:14:10] Speaker 06:
May it please the court.

[00:14:11] Speaker 06:
My name is James Carr and I represent the Federal Communications Commission.

[00:14:19] Speaker 06:
ADX was making an extraordinary request of the FCC here.

[00:14:24] Speaker 06:
It concedes that under a straightforward application of the FCC's rules, the transactions at issue here comply with the radio ownership caps.

[00:14:34] Speaker 06:
Notwithstanding that facial compliance, it argued that the FCC should deny those transactions because, according to ADX, they were not in the public interest.

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Now, to make that kind of extraordinary request and have the FCC grant it, ADX bore a heavy burden.

[00:14:55] Speaker 06:
Under Section 3091 of the Communications Act, it had to allege sufficient facts to show that

[00:15:03] Speaker 06:
These particular transactions were prima facie inconsistent with the public interest, and it failed to carry that burden.

[00:15:13] Speaker 06:
In the Bureau's order, Joint Appendix, page 511,

[00:15:19] Speaker 06:
The Bureau specifically found under the public interest analysis, ADX has failed to allege specific facts to indicate that despite cumulus' facial compliance with the Commission's rules, the applications pose a risk of harm to competition within the Pensacola or mobile markets.

[00:15:37] Speaker 06:
Keep in mind the concern here is a harm to competition.

[00:15:41] Speaker 06:
And the next sentence is critical.

[00:15:43] Speaker 06:
The numerical limits approach is designed to promote competition by assuring that a sufficient number of rivals are actively engaged in competition for listening audiences.

[00:15:53] Speaker 06:
That last clause is particularly important, actively engaged in competition for listening audiences.

[00:16:00] Speaker 06:
All that ADX presented the FCC with was technical engineering data about signal coverage areas involving these particular stations, where they could reach, where their signal reached.

[00:16:15] Speaker 06:
It provided no information whatsoever about whether these stations in fact competed in both Pensacola.

[00:16:22] Speaker 06:
and mobile.

[00:16:24] Speaker 06:
The mere fact that their signal can reach both markets does not necessarily ensure that they are actively competing for local advertisers.

[00:16:32] Speaker 06:
And Arbitron has looked at evidence, the sort of evidence that the Department of Justice looks at when it engages in antitrust analysis.

[00:16:40] Speaker 01:
Market-based competition analysis.

[00:16:42] Speaker 01:
Why not?

[00:16:43] Speaker 01:
Why is it the case that actual competition, well, actual signal coverage overlap does not mean competition?

[00:16:51] Speaker 06:
Well, because what Arbitron has found in studying these markets is that it looks at evidence such as advertising revenues, ratings for these stations in particular markets, and in its experience it has found that these stations, even if they reach both Pensacola and Mobile, tend to gravitate toward one community or the other.

[00:17:16] Speaker 06:
they don't actively compete or effectively compete in both markets.

[00:17:21] Speaker 01:
Just intuitively I don't get it because that might be the result of competition that it turns out that it's segmented.

[00:17:26] Speaker 01:
I guess I just don't understand why they're not actually competing for the same eyeballs.

[00:17:29] Speaker 06:
Well, here's the thing, Your Honor.

[00:17:32] Speaker 06:
You're looking at two separate municipal communities in two different states with two different sets of local advertisers and... Maybe, maybe not.

[00:17:45] Speaker 06:
Well, again, but if you're going to question the Arbitron market definition, Your Honor, you're going to have to come forward with more evidence than just a map with a lot of circles on it about signal contour.

[00:17:59] Speaker 02:
What type of evidence would be required?

[00:18:02] Speaker 06:
Well, I think what ADX would have had to do would have been to come up with the sort of evidence that Arbitron was analyzing.

[00:18:12] Speaker 06:
advertising revenues, advertising strategies, ratings.

[00:18:17] Speaker 02:
I mean, this is a big company, all right?

[00:18:20] Speaker 02:
If you look at the concentric circles, I mean, they're all in the same market.

[00:18:30] Speaker 02:
I'm just trying to understand, I thought the whole purpose of the FCC's approach here was

[00:18:38] Speaker 02:
and I'm not getting to its decision to use Arbitron as a measure, but it's simply that you wanted competition in the sense that the communities listening would be hearing from different voices.

[00:18:54] Speaker 02:
That's right, Your Honor, and that's why... Which is different, if I can posit, from

[00:19:03] Speaker 02:
where the station is looking for advertising.

[00:19:06] Speaker 02:
The two aren't necessarily synonymous.

[00:19:10] Speaker 06:
They aren't, but both considerations go into the numerical ownership caps.

[00:19:17] Speaker 06:
There are considerations about diversity of viewpoints.

[00:19:20] Speaker 06:
There's also a concern about economic concentration.

[00:19:22] Speaker 02:
But the response here was there are 10 owners in each market.

[00:19:26] Speaker 06:
That's right.

[00:19:28] Speaker 02:
And therefore, that's the end of the analysis.

[00:19:31] Speaker 02:
and that overlap is not unique.

[00:19:34] Speaker 06:
That's correct.

[00:19:35] Speaker 02:
And that's the end of the day analysis.

[00:19:37] Speaker 06:
Yes, that's right.

[00:19:40] Speaker 06:
And again, I think the purpose, the public interest objective of the ownership caps is to ensure that there is not a concentration of radio stations in the hands of one or a few owners in the relevant local markets.

[00:19:57] Speaker 06:
So the question here is all about the way you define the markets.

[00:20:01] Speaker 02:
That's all that the commission's arbitron methodology is interested in?

[00:20:10] Speaker 06:
Well, the arbitron methodology is interested in... There are multiple owners.

[00:20:14] Speaker 02:
No company owns more than six stations.

[00:20:19] Speaker 02:
And, you know, the home is defined by the commission, and you have these arbitron ratings.

[00:20:28] Speaker 02:
That's the universe that the commission has decided to...

[00:20:34] Speaker 02:
look at in addressing these challenges.

[00:20:36] Speaker 06:
Well, that's right, Your Honor.

[00:20:37] Speaker 06:
And keep in mind, Arbitron is an industry standard.

[00:20:40] Speaker 06:
This is the way radio stations and local advertisers are able to judge the marketplace.

[00:20:45] Speaker 02:
And the Department of Justice uses that as well.

[00:20:47] Speaker 02:
Do you understand the disconnect I'm trying to understand here?

[00:20:49] Speaker 06:
I'm not sure I do, but please.

[00:20:52] Speaker 02:
For example, if you had 10 owners or 20 owners in one market and they're all doing country music,

[00:21:00] Speaker 02:
All right, there are 10 owners, and they're all playing the same records, the same, what do you call them these days?

[00:21:07] Speaker 02:
Disc, whatever.

[00:21:10] Speaker 02:
It's true, they're in different Arbitron markets.

[00:21:15] Speaker 02:
It's true, there are 10 owners.

[00:21:21] Speaker 02:
The communities are hearing nothing but country.

[00:21:25] Speaker 02:
And the commission doesn't care about that?

[00:21:27] Speaker 06:
Well, that's a separate question, Your Honor, I think.

[00:21:30] Speaker 02:
Well, that's what I just want to be clear about, that the challenge here, where he talks about the commission didn't give a hard look at what's going on here, are you telling me that that is just not part of the relevant universe when you're challenging the arbitron scheme that the commission has adopted?

[00:21:53] Speaker 06:
I would say that the hard look here is whether or not there was sufficient evidence to determine that the Arbitron markets were not an accurate reflection of the state of actual market competition.

[00:22:06] Speaker 02:
That is... And so the answer to my question is yes?

[00:22:12] Speaker 06:
Well, again, I'm not sure.

[00:22:14] Speaker 06:
Can you repeat the question?

[00:22:16] Speaker 06:
I'm sorry.

[00:22:17] Speaker 02:
My hypothetical.

[00:22:18] Speaker 06:
Yes.

[00:22:19] Speaker 02:
Everybody's hearing country and nothing but.

[00:22:23] Speaker 06:
Well, if everybody's hearing country within the same market.

[00:22:26] Speaker 02:
In other words, under this scheme, the Commission does not care about

[00:22:33] Speaker 02:
what the communities are hearing?

[00:22:36] Speaker 06:
Well, that's right.

[00:22:37] Speaker 06:
It's not so much a question of... I think the assumption is that if you have different station owners, they will presumably be looking for different niches in the marketplace, unless everybody in that market wants to hear country and nothing else.

[00:22:55] Speaker 05:
I understand that.

[00:22:56] Speaker 06:
That the market will work.

[00:22:57] Speaker 06:
I don't want to live there.

[00:22:59] Speaker 06:
I'm sorry?

[00:23:00] Speaker 06:
I don't want to live there.

[00:23:04] Speaker 06:
Unfortunately, ADX's main station in this market has nothing but country.

[00:23:11] Speaker 05:
Even with 10 owners?

[00:23:13] Speaker 06:
Oh, yeah.

[00:23:16] Speaker 06:
But actually, the one thing that I wanted to point out, and the commission's interveners pointed this out in their brief, that ADX did not come forward with any evidence related to these particular 14 stations competition in the signal contour area.

[00:23:38] Speaker 02:
So if it had come forward with evidence,

[00:23:42] Speaker 02:
that the only thing listeners are hearing is country.

[00:23:46] Speaker 02:
That would have been irrelevant.

[00:23:48] Speaker 06:
That would have been irrelevant to this particular analysis, Your Honor.

[00:23:51] Speaker 06:
That's correct.

[00:23:53] Speaker 06:
Yes.

[00:23:54] Speaker 02:
So all we care about is corporate ownership and advertising revenues.

[00:23:58] Speaker 06:
Well, and the thought is that when you have a diverse group of owners, that it is likely that they will have

[00:24:06] Speaker 06:
diverse viewpoints or diverse programming formats.

[00:24:09] Speaker 02:
Now part of that depends on the... But you just told me, you just told me.

[00:24:11] Speaker 02:
That's what I'm trying to understand about this system.

[00:24:13] Speaker 02:
You just told me whether everybody's hearing only country is irrelevant.

[00:24:18] Speaker 06:
That's not the Commission's concern.

[00:24:20] Speaker 06:
That's right.

[00:24:20] Speaker 02:
Well, I'm asking you as a council representing the Commission... I understand your... ...explaining this rule.

[00:24:26] Speaker 02:
What is the universe that's relevant?

[00:24:29] Speaker 02:
And you have argued here today that

[00:24:33] Speaker 02:
The challenge failed to produce evidence beyond this technical tower strength data.

[00:24:41] Speaker 02:
And I'm trying to understand what evidence needed to be presented beyond technical capability.

[00:24:49] Speaker 06:
And the evidence would be evidence that, for example, they make the assumption that all of these stations, because they can reach both Pensacola and Mobile, must obviously compete in both Pensacola and Mobile.

[00:25:02] Speaker 06:
But that assumption is unsupported.

[00:25:05] Speaker 06:
And in fact, I was curious.

[00:25:08] Speaker 02:
And what was the evidence that you would present, other than tower strength,

[00:25:13] Speaker 06:
I think you would present evidence along the lines of what Arbitron has studied, advertising revenues for these stations in the different markets.

[00:25:23] Speaker 06:
Their ratings, are they in fact gaining sufficient audience in both Mobile and Pensacola to be a real factor in those markets?

[00:25:34] Speaker 06:
It was interesting.

[00:25:35] Speaker 01:
In other words, your point is even if their signal overlapped, there can still be real competition.

[00:25:40] Speaker 05:
Yes, because at least the way Arbitron has seen it, these stations... Even if their signals overlap, there might not be competition.

[00:25:50] Speaker 06:
Well, the way Arbitron has seen it, even when these stations have overlap into both markets... There might not be competition.

[00:25:59] Speaker 06:
These stations tend to focus on one market or the other, so they're not all... The six stations that

[00:26:08] Speaker 06:
ADX is focusing on, some of them have been assigned to Pensacola, some of them have been assigned to Mobile.

[00:26:14] Speaker 06:
That is due to the nature of their programming and the competitive statistics, the advertising revenues.

[00:26:22] Speaker 05:
To challenge that, the petition here would have to come up with evidence showing that in this particular market, that's wrong, that these stations are in fact competing with each other.

[00:26:33] Speaker 05:
contrary to what Arbitron says, right?

[00:26:36] Speaker 06:
That's right, that they are competing with each other in both Pensacola and Mobile.

[00:26:43] Speaker 06:
What ADX was trying to argue was that at least in this area, Pensacola and Mobile were effectively a single market.

[00:26:49] Speaker 01:
Yeah, I guess what I'm saying is even if they're single, those will act from the same order.

[00:26:54] Speaker 01:
Yes.

[00:26:54] Speaker 01:
They can still have competition.

[00:26:55] Speaker 01:
That's right.

[00:26:56] Speaker 01:
That's the commission point.

[00:26:57] Speaker 06:
Oh, you certainly could.

[00:26:58] Speaker 06:
That's right, Your Honor.

[00:27:00] Speaker 01:
Can I ask you quickly about the standing question that was raised earlier by the two-year-olds?

[00:27:05] Speaker 01:
I guess I'm not quite following your argument in the following sense that if what the two-year rule means to do is to prevent an applicant from exploiting a change in the Arbitron methodology that they themselves sought, then it's sort of like saying we want to prevent the appearance of impropriety.

[00:27:24] Speaker 01:
So what we want to do is we want to make sure that someone doesn't gain the system by going to Arbitron, getting some sort of change, and then immediately turning around and getting a benefit from that from the Commission.

[00:27:33] Speaker 01:
Now, if somebody does that within the two years, they've reached that rule.

[00:27:37] Speaker 01:
It doesn't matter then if two years have elapsed already because they've reached the rule.

[00:27:40] Speaker 01:
And so the answer would be, well, then you vacate because they should have waited two years, they didn't, and then you let them apply again.

[00:27:48] Speaker 01:
So then they're standing because the party would get the benefit from it.

[00:27:51] Speaker 01:
It doesn't tell you, obviously, on the merits you can still prevail on the ground that the two-year rule just doesn't apply to the circumstance at all.

[00:27:57] Speaker 06:
I take your point.

[00:28:00] Speaker 06:
I think that probably would be a possible remedy.

[00:28:05] Speaker 06:
I don't think there is any merit to their argument.

[00:28:09] Speaker 06:
The court should reach the merits.

[00:28:11] Speaker 06:
I don't think there's any merit to their argument regarding the two-year waiting period.

[00:28:14] Speaker 06:
It clearly was limited to

[00:28:16] Speaker 06:
these Arbitron-based decisions, for the Commission to have extended it here to a community of license change would have been beyond the existing rule and there was no reason to do it.

[00:28:28] Speaker 06:
And the Commission explained why, on the merits.

[00:28:31] Speaker 06:
That's right.

[00:28:32] Speaker 05:
Let me just pursue that, because I had exactly the same question, Judge Srinivasan.

[00:28:35] Speaker 05:
I thought your answer was going to be, look, if this court,

[00:28:44] Speaker 05:
If we say that it's, if we send it back, because if we address the two-year issue.

[00:28:56] Speaker 01:
Right.

[00:28:57] Speaker 05:
And let's assume there's a violation of that.

[00:29:00] Speaker 05:
I understand you are even on the merits, but just assume for a minute you have a case where there was manipulation of the arbitrage standards, okay?

[00:29:07] Speaker 05:
But not a change in community interest.

[00:29:10] Speaker 06:
Yes.

[00:29:11] Speaker 05:
And so under those circumstances, that applicant at that time, that application should have been judged by the commission under the pre-arbitron rules, right?

[00:29:27] Speaker 05:
I thought you were saying, yes, but since the two years up, if you send it back, the two years are up.

[00:29:34] Speaker 05:
the commission's going to apply the arbitron standards and the result will be the same.

[00:29:39] Speaker 05:
Is that your argument?

[00:29:40] Speaker 05:
Yes, that is the argument.

[00:29:41] Speaker 06:
So that's like a redressability argument.

[00:29:43] Speaker 06:
It goes to redressability, that's right.

[00:29:45] Speaker 06:
Even if there had been a manipulation, the party was entitled after two years to rely on that change going forward.

[00:29:55] Speaker 05:
Even if it had manipulated it.

[00:29:56] Speaker 06:
Even if it had been manipulated.

[00:29:57] Speaker 05:
And therefore, if we decided

[00:30:00] Speaker 05:
If in a different case, where there was a plain, clear violation of manipulation, and we set it back, the commission, since the two years is up, the commission would say, all right, the two years is up, we're going to apply Arbitron, the results the same.

[00:30:15] Speaker 05:
So in terms of Article 3, your point is, there's nothing redressable here.

[00:30:20] Speaker 06:
That's it.

[00:30:24] Speaker 06:
There's no remedy here for ADS.

[00:30:26] Speaker 01:
Well, how do we know that necessarily it would reach the same result?

[00:30:29] Speaker 01:
I mean, what you're saying is you can reliably predict that you would reach the same result.

[00:30:35] Speaker 01:
Or maybe I'm misunderstanding.

[00:30:36] Speaker 06:
No, I don't think you are misunderstanding.

[00:30:39] Speaker 06:
I think the Commission would, if the issue were to be remanded to the Commission, the Commission would apply the same standard it had applied before.

[00:30:51] Speaker 05:
Because the two years are up.

[00:30:52] Speaker 05:
Because the two years are up.

[00:30:53] Speaker 05:
So then no one would, I mean, the Commission doesn't move fast enough to, no one could ever challenge this under your theory, right?

[00:31:01] Speaker 05:
Because two years, you're never going to get it done in two years, are you?

[00:31:06] Speaker 06:
I suppose the answer to that would be, Your Honor.

[00:31:08] Speaker 05:
Well, the Commission could just wait two years and protect itself.

[00:31:12] Speaker 06:
If a party really wanted to challenge this and ensure that it could challenge this, it would presumably ask

[00:31:21] Speaker 06:
the Commission to stay its hand pending judicial review, or it might seek mandamus from a court and try to get... I suspect, I know what the Commission would argue if they saw mandamus.

[00:31:37] Speaker 05:
I suspect I know too, Your Honor.

[00:31:39] Speaker 05:
Yes, you know that standard.

[00:31:40] Speaker 05:
No one's going to give me a mandamus in a case like that, so that's not an option.

[00:31:45] Speaker 06:
Well, that's the only option I can come up with in this circumstance.

[00:31:55] Speaker 02:
Anything further?

[00:31:56] Speaker 06:
I have nothing further.

[00:31:58] Speaker 06:
I just ask that the court affirm the commission in this case.

[00:32:02] Speaker 06:
Thank you very much.

[00:32:03] Speaker 02:
Thank you.

[00:32:06] Speaker 02:
Council for Appellant.

[00:32:11] Speaker 03:
Thank you.

[00:32:11] Speaker 03:
Just three points I want to quickly make.

[00:32:14] Speaker 03:
The commission, the main problem I have with the commission's argument is that it again engages in a number of fictions, just like it does with respect to coverage, as I argued previously.

[00:32:26] Speaker 03:
First of all, the basic assertion is that these stations do not actively compete in some way or form.

[00:32:32] Speaker 03:
Some are focused on mobile markets, some are focused on Pescicola.

[00:32:35] Speaker 03:
They operate from the same tower.

[00:32:36] Speaker 03:
I mean, come on.

[00:32:38] Speaker 03:
For the commission to claim that, first of all, there's no evidence whatsoever that their assertion is right.

[00:32:43] Speaker 03:
All they are is testifying.

[00:32:44] Speaker 03:
And I'm not even sure on what basis they're testifying that these stations, some focus on Pensacola and some focus on Mobile.

[00:32:50] Speaker 03:
There's absolutely no evidence in the record one way or the other with respect to that.

[00:32:55] Speaker 03:
Another fiction that they're operating under is they keep saying that Arbitron does this, Arbitron does that, Arbitron does this.

[00:33:02] Speaker 03:
The fact of the matter is that Arbitron is a private company.

[00:33:04] Speaker 03:
In many respects, it accommodates station owners.

[00:33:08] Speaker 03:
And there's no evidence whatsoever in the record here that Arbitron ever studied these stations in any way or form to see whether or not they actively compete.

[00:33:15] Speaker 03:
The fact of the matter is that Arbitron only assigns statements to one market or another market.

[00:33:20] Speaker 03:
It's largely based on FTCC regulations.

[00:33:23] Speaker 05:
But the Arbitron standards were challenged in court in the Third Circuit and sustained.

[00:33:31] Speaker 03:
Generally it works just fine.

[00:33:32] Speaker 05:
You can't, you're not going to succeed by challenging the Arbitron standard.

[00:33:36] Speaker 03:
And I'm not challenging the Arbitron standard in general.

[00:33:39] Speaker 03:
I'm just saying that it, for them to say in this particular case that Arbitron studied anything is overreaching.

[00:33:45] Speaker 03:
Totally overreaching.

[00:33:48] Speaker 03:
And the third point I want to make as far as a fiction here is that when you're talking about the number of competitors within a market that exists,

[00:33:55] Speaker 03:
If in other cases there are situations where three owners parse out basically the stations and H are just up to the limit but not over the limit.

[00:34:05] Speaker 03:
The FCC has never studied whether included in their decision making process whatsoever that okay it's all right because

[00:34:13] Speaker 03:
They're under the limit and because there's a sufficient number of owners in the marketplace, which case in my hypothetical there'd be only three.

[00:34:20] Speaker 03:
10, three, whatever.

[00:34:22] Speaker 03:
The question is, unfortunately, the FCC's analysis is simply whether or not you're above or under the multiple ownership limit.

[00:34:30] Speaker 03:
The level of competition is not a valid test that they should be applying in this case whatsoever.

[00:34:36] Speaker 03:
All right.

[00:34:36] Speaker 02:
Thank you.

[00:34:37] Speaker 02:
Thank you.

[00:34:37] Speaker 02:
We'll take the case under advisement.