[Federal Register Volume 68, Number 150 (Tuesday, August 5, 2003)]
[Proposed Rules]
[Pages 46359-46362]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 03-19091]



Federal Register / Vol. 68, No. 150 / Tuesday, August 5, 2003 / 
Proposed Rules

[[Page 46359]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 03-130; FCC 03-127]


Definition of Radio Markets for Areas Not Located in an Arbitron 
Survey Area

AGENCY: Federal Communications Commission

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document is designed to solicit comment on proposals to 
define radio markets outside of the Arbitron defined areas. The 
Commission replaced the current contour-overlap methodology for 
defining radio markets with a geography-based market definition. For 
areas of the country covered by Arbitron Metro markets, we adopted the 
Metro market as the relevant radio market for purposes of determining 
compliance with the local radio ownership rule. Metro markets, however, 
do not cover a significant portion of the country. We initiate this 
rulemaking proceeding to define radio markets for those areas.

DATES: Comments are due on or before September 4, 2003 and reply 
comments are due September 19, 2003.

ADDRESSES: Office of the Secretary, Federal Communications Commission, 
445 12th Street SW., Washington, DC 20554. See SUPPLEMENTARY 
INFORMATION for filing instructions.

FOR FURTHER INFORMATION CONTACT: Amy Brett, Media Bureau at (202) 418-
2703.

SUPPLEMENTARY INFORMATION: 1. This is a summary of the Commission's 
Notice of Proposed Rulemaking (NPRM) MB Docket No. 03-130, FCC 03-127, 
adopted June 2, 2003, and released July 2, 2003. The complete text of 
the NPRM and the Initial Regulatory Flexibility Analysis is available 
on the Commission's Internet site, at http://www.fcc.gov., and is also 
available for inspection and copying during normal business hours in 
the FCC Reference Information Center, Courtyard Level, 445 12th Street, 
SW., Washington, DC. The text may also be purchased from the 
Commission's copy contractor, Qualex International, Portals II, 445 
12th Street, SW., CY-B4202, Washington, DC 20554 (telephone 202-863-
2893).
    2. In the Local Radio Section of the final rule in this proceeding 
(published in the final rule section of this Federal Register), we 
replaced our current contour-overlap methodology for defining radio 
markets with a geography-based market definition. 47 CFR 73.3555(a)(2). 
For areas of the country covered by Arbitron Metro markets, we adopted 
the Metro market as the relevant radio market for purposes of 
determining compliance with the local radio ownership rule. A 
significant portion of the country, however, is not covered by Metro 
markets. We initiate this rulemaking proceeding to define radio markets 
for those areas.
    3. We seek comment on how to draw specific market boundaries in 
areas of the country not located in Arbitron Metros. What factors 
should we consider in grouping radio stations into markets? We propose 
that radio markets be county-based, as Arbitron Metros are. We seek 
comment on that proposal. In the western United States, counties are 
significantly larger. We seek comment on whether we should, like 
Arbitron, divide counties into separate radio markets in certain 
circumstances. We also propose that radio stations be assigned to radio 
markets based on the location of their communities of license. We seek 
comment on this proposal.
    4. We seek comment on whether we should rely on any pre-existing 
market definitions in delineating radio markets for non-Metro areas. As 
indicated in the Local Radio Section, Arbitron traditionally has based 
its Metro definitions on the Metropolitan Area (MA) definitions 
developed by OMB. Should we also do the same for non-Metro areas? OMB 
recently released new MA definitions based on the results of the 2000 
Census.\1\ The 935 new MAs, moreover, cover a greater portion of the 
country. Previously, MAs were defined only for urban areas with a 
population of 50,000.\2\ The new MA definitions cover areas with a 
population of 10,000 to 50,000 (known as Micropolitan Statistical 
Areas), which should greatly increase the number of radio stations 
located in MAs.\3\ If we rely on MAs, how should we address future 
changes to MA definitions, and the creation of a new, or the deletion 
of an existing, MA \4\ In addition, even with the expanded reach of the 
new MAs, there will be areas that they do not cover. How should the 
radio market be defined in those areas if MAs are used? One possible 
method is to establish geographic markets based on the location, 
distribution, and density of populated areas.\5\ Because population 
clusters are likely to indicate areas of economic and social 
interaction, the location and distribution of the centers of population 
should give us a reasonable indicator of the boundaries of the relevant 
geographic market in which radio stations compete. Because the 
geographic areas involved generally will be low-density and rural areas 
of the country, moreover, we believe that population data could provide 
a fairly reliable and easily determinable market definition. We seek 
comment on this and any other methods.
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    \1\ See OMB Bulletin No. 03-04, http://www.whitehouse.gov/omb/
omb/bulletins/b03-04.html. In 2000, OMB revised its procedures for 
defining MAs. In addition, it adopted the more generic term Core 
Based Statistical Area (CBSA) to cover both traditional Metropolitan 
Areas and the new Micropolitan Statistical Areas. See generally 
Standards for Defining Metropolitan and Micropolitan Statistical 
Areas, 65 FR 82228 (2000). Although less accurate, we will use 
former term--i.e., MAs--to avoid confusion.
    \2\ See U.S. Census Bureau, Cartographic Boundary Files, http://
www.census.gov/geo/www/cob/ma_metadata.html (visited May 30, 
2003).
    \3\ See 65 FR 82236-37 for a detailed description of the 
standards OMB uses to define MAs.
    \4\ See id. at 82237 for the rules governing future updates to 
MAs.
    \5\ Population data is available over the Internet from the 
Census Bureau.
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    5. Another possibility is to treat Cellular Market Areas (CMAs) as 
the relevant geographic market for radio. CMAs were developed in the 
mid-1980s to be the geographic basis for licensing cellular spectrum. 
CMAs consist of MAs (as they were defined after the 1980 census) and 
Rural Service Areas (RSAs),\6\ which the Commission delineated for 
areas of the country not located in MAs.\7\ Although CMAs were not 
developed in the context of radio broadcasting, they were designed to 
follow ``natural social and economic communities'' through ``multi-
county groupings drawn along county boundaries.'' \8\ Are CMAs a 
reasonable proxy for radio markets in non-Metro areas of the country? 
We seek comment on this issue.
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    \6\ See Amendment of the Commission's Rules for Rural Cellular 
Service, 1985 WL 260366, FCC 85-646, ]1 (rel. Dec. 17, 1985).
    \7\ Amendment of the Commission's Rules for Rural Cellular 
Service, 60 Radio Reg. (P&F) 1029, ]1 (1986).
    \8\ Id. at ]11.
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    6. For any market definition we establish, how should we address 
situations in which that market overlaps an Arbitron Metro. If we use 
MAs or CMAs, there will be existing areas of overlap. Even if we define 
radio markets around existing Arbitron Metros, Metro boundaries may 
change, or Arbitron may create or delete a Metro. We seek comment on 
how to address the possibility of a market overlap (or in the case of a 
deleted Metro, the possibility of an undefined market).
    7. The goal of this rulemaking proceeding is to generate a map or a 
list of markets for radio stations across the entire country, using 
Arbitron Metros where available and a Commission-

[[Page 46360]]

endorsed market definition everywhere else. We therefore encourage 
parties to use this opportunity to submit specific information that 
would assist is in properly delineating the boundaries of the local 
radio markets in which they are interested.
    8. Comments and Reply Comments. Pursuant to applicable procedures 
set forth in sections 1.415 and 1.419 of the Commission's rules,\9\ 
interested parties may file comments on the Notice of Proposed 
Rulemaking on September 4, 2003 and reply comments are due September 
19, 2003. Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS) or by filing paper copies. See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
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    \9\ 47 CFR 1.415 and 1.419.
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    9. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. In 
completing the transmittal screen, commenters should include their full 
name, U.S. Postal Service mailing address, and the applicable docket, 
which in this instance is MB Docket No. 03-130. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions 
for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, 
and should include the following words in the body of the message, 
``get form .'' A sample form and 
directions will be sent in reply. Parties who choose to file by paper 
must file an original and four copies of each filing. Filings can be 
sent by hand or messenger delivery, by commercial overnight courier, or 
by first-class or overnight U.S. Postal Service mail (although we 
continue to experience delays in receiving U.S. Postal Service mail). 
The Commission's contractor, Vistronix, Inc., will receive hand-
delivered or messenger-delivered paper filings for the Commission's 
Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 
20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building. Commercial 
overnight mail (other than U.S. Postal Service Express Mail and 
Priority Mail) must be sent to 9300 East Hampton Drive, Capitol 
Heights, MD 20743. U.S. Postal Service first-class mail, Express Mail, 
and Priority Mail should be addressed to 445 12th Street, SW., 
Washington, DC 20554. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    10. Parties must also serve either one copy of each filing via e-
mail or two paper copies to Qualex International, Portals II, 445 12th 
Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 863-
2893, facsimile (202) 863-2898, or e-mail at qualexint@aol.com. In 
addition, parties should serve one copy of each filing via e-mail or 
one paper copy to Amy Brett, Media Bureau, 445 12th Street, SW., 2-
C134, Washington, DC 20554. Parties should serve one copy of each 
filing via e-mail or five paper copies to Linda Senecal, 445 12th 
Street, SW., 2-C438, Washington, DC 20554.
    11. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. Persons with disabilities who need assistance in the FCC 
Reference Center may contact Bill Cline at (202) 418-0267, (202) 418-
7365 TTY, or bcline@fcc.gov. These documents also will be available 
electronically at the Commission's Disabilities Issues Task Force Web 
site: http://www.fcc.gov/dtf, and from the Commission's Electronic 
Comment Filing System. Documents are available electronically in ASCII 
text, Word 97, and Adobe Acrobat. Copies of filings in this proceeding 
may be obtained from Qualex International, Portals II, 445 12th Street, 
SW., Room, CY-B402, Washington, DC 20554, telephone (202) 863-2893, 
facsimile (202) 863-2898, or via e-mail at qualexint@aol.com. To 
request materials in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an e-mail 
to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau 
at 202-418-0531 (voice), 202-418-7365 (TTY).
    12. Ex Parte Rules. This proceeding will be treated as a ``permit-
but-disclose'' proceeding, subject to the ``permit-but-disclose'' 
requirements under section 1.1206(b) of the Commission's rules.\10\ Ex 
parte presentations are permissible if disclosed in accordance with 
Commission rules, except during the Sunshine Agenda period when 
presentations, ex parte or otherwise, are generally prohibited. Persons 
making oral ex parte presentations are reminded that a memorandum 
summarizing a presentation must contain a summary of the substance and 
not merely a listing of the subjects discussed. More than a one or two 
sentence description of the views and arguments presented is generally 
required.\11\ Additional rules pertaining to oral and written 
presentations are set forth in section 1.1206(b) of the Commission's 
rules. Parties submitting written ex parte presentations or summaries 
of oral ex parte presentations are urged to use the ECFS in accordance 
with the Commission rules discussed above. Parties filing paper ex 
parte submissions must file an original and one copy of each submission 
with the Commission's Secretary, Marlene H. Dortch, at the appropriate 
address as shown above for filings sent by either U.S. mail, overnight 
delivery, or hand or messenger delivery. Parties must also serve either 
one copy of each ex parte filing via e-mail or two paper copies to 
Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-
2898, or e-mail at qualexint@aol.com. In addition, parties should serve 
one copy of each ex parte filing via email or one paper copy to Amy 
Brett, Media Bureau, 445 12th Street, SW., 2-C134, Washington, DC 
20554. Parties should serve one copy of each ex parte filing via email 
or five paper copies to Linda Senecal, 445 12th Street, SW., 2-C438, 
Washington, DC 20554.
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    \10\ 47 CFR 1.1206(b).
    \11\ See id. Sec.  1.1206(b)(2).
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    13. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act (RFA),\12\ the Commission has prepared this 
present Initial Regulatory Flexibility Analysis (IRFA) of the possible 
significant economic impact on small entities by the policies and rules 
proposed in this Notice of Proposed Rulemaking (``NPRM''). Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for 
comments on the NPRM.
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    \12\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et seq., has 
been amended by the Contract With America Advancement Act of 1996, 
Pub. L. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA 
is the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA).
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    14. The Commission will send a copy of the NPRM, including this 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA).

A. Need for, and Objectives of, the Proposed Rules

    15. Section 202(h) of the Telecommunications Act of 1996 (1996 Act) 
requires the Commission to review all of its broadcast ownership rules

[[Page 46361]]

every two years commencing in 1998 (``Biennial Review''), and to 
determine whether any of these rules are necessary in the public 
interest as the result of competition. The 1996 Act also requires the 
Commission to repeal or modify any regulation it determines to be no 
longer in the public interest. In the 2002 Biennial Report and Order, 
the Commission concluded that the numerical limits in the local radio 
ownership rule are necessary in the public interest to protect 
competition in local radio markets. We also concluded that the rule in 
its current form did not promote the public interest as it relates to 
competition, in part, because the current methodology for defining 
radio markets is conceptually flawed as a means to protect competition 
in local radio markets. Thus, the Commission revised the present method 
of determining the dimensions of radio markets and/or of counting the 
stations available in those markets. The new geographic based approach 
better serves the public interest, reflects true markets in which radio 
stations compete, and better effectuates Congressional intent when it 
adopted the radio ownership limits in 1996. In the 2002 Biennial Report 
and Order, the Commission adopted a geography-based approach using 
Arbitron-defined markets. However, the Commission found that the 
current record provides insufficient information about appropriate 
boundaries for areas located outside of Arbitron defined areas. This 
NPRM is designed to solicit comment on proposals to define radio 
markets outside of Arbitron defined areas.

B. Legal Basis

    16. This NPRM is adopted pursuant to sections 1, 2(a), 4(i), 303, 
307, 309, 310, of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152(a), 154(i), 303, 307, 309, 310, and section 202(h) of the 
Telecommunications Act of 1996.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    17. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\13\ The RFA defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental entity 
under Section 3 of the Small Business Act.\14\ In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act.\15\ A small business concern is 
one which: (1) is independently owned and operated; (2) is not dominant 
in its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\16\
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    \13\ 5 U.S.C. 603(b)(3).
    \14\ Id. section 601(3) (incorporating by reference the 
definition of ``small business concern'' in 15 U.S.C. 632). Pursuant 
to the RFA, the statutory definition of a small business applies, 
``unless an agency, after consultation with the Office of Advocacy 
of the SBA and after opportunity for public comment, establishes one 
or more definitions of the term where appropriate to the activities 
of the agency and publishes the definition(s) in the Federal 
Register.''
    \15\ Id.
    \16\ 15 U.S.C. 632.
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    18. In this context, the application of the statutory definition to 
radio stations is of concern. An element of the definition of ``small 
business'' is that the entity not be dominant in its field of 
operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific radio station is 
dominant in its field of operation. Accordingly, the estimates that 
follow of small businesses to which rules may apply do not exclude any 
radio station from the definition of a small business on this basis and 
are therefore over-inclusive to that extent. An additional element of 
the definition of ``small business'' is that the entity must be 
independently owned and operated. We note that it is difficult at times 
to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
    19. The SBA defines a radio broadcast entity that has $6 million or 
less in annual receipts as a small business.\17\ Business concerns 
included in this industry are those ``primarily engaged in broadcasting 
aural programs by radio to the public.\18\ According to Commission 
staff review of the BIA Publications, Inc., Master Access Radio 
Analyzer Database, as of May 16, 2003, about 10,427 of the 10,945 
commercial radio stations in the United States have revenue of $6 
million or less. We note, however, that many radio stations are 
affiliated with much larger corporations with much higher revenue, and 
that in assessing whether a business concern qualifies as small under 
the above definition, such business (control) affiliations \19\ are 
included.\20\ Our estimate, therefore likely overstates the number of 
small businesses that might be affected by any changes to the ownership 
rules.
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    \17\ See OMB, North American Industry Classification System: 
United States, 1997, at 509 (1997) (Radio Stations) (NAICS code 
513111, which was changed to code 515112 in October 2002).
    \18\ Id.
    \19\ ``Concerns are affiliates of each other when one concern 
controls or has the power to control the other, or a third party or 
parties controls or has the power to control both.'' 13 CFR 
121.103(a)(1).
    \20\ ``SBA counts the receipts or employees of the concern whose 
size is at issue and those of all its domestic and foreign 
affiliates, regardless of whether the affiliates are organized for 
profit, in determining the concern's size.'' 13 CFR 121(a)(4).
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    20. The NPRM proposes to modify the definition of radio markets 
outside of Arbitron defined areas. The action, depending on the 
definition ultimately adopted, would modify the instructions and the 
multiple ownership showing currently required for the following forms: 
(1) FCC Form 315, Application for Consent to Transfer Control of Entity 
Holding Broadcast Station Construction Permit or License; (2) FCC Form 
314, Application for Consent to Assignment of Broadcast Station 
Construction Permit or License; and (3) FCC Form 301, Application for 
Construction Permit For Commercial Broadcast Stations. The impact of 
these changes will be the same on all entities. Whether compliance will 
take more, less, or the same amount of time and money, will depend on 
the definition adopted.

E. Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    21. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.\21\
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    \21\ 5 U.S.C. 603(c).
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    22. We are directed under law to consider alternative means to 
achieve our stated objectives.\22\ In the 2002 Biennial Report and 
Order, the Commission considered and rejected alternatives to defining 
radio markets through the rulemaking process. Specifically, the 
Commission found that

[[Page 46362]]

determining radio markets on a case-by-case basis would create 
significant regulatory uncertainty and impose substantial burdens on 
small-market radio broadcasters, many of which are small businesses. 
The Commission concluded that the better course is to develop radio 
market definitions for non-Metro areas through the rulemaking process. 
The Commission found that this would be the most expeditious way to 
define local radio market boundaries for the entire country. Defining 
radio markets also would give all interested parties, including small 
businesses, clear guidance about how the Commission will analyze a 
proposed radio station combination in non-Arbitron areas.
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    \22\ 5 U.S.C. 603(b).
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    23. The NPRM invites comment on how to modify the current 
methodology for determining radio markets for areas of the country 
outside of Arbitron defined areas. The Commission has a number of 
alternatives on which it invites comment. We particularly invite 
comment on how the various alternatives might impact on small 
businesses and on alternatives outside the NPRM which might minimize 
any burden on small businesses.
    24. The Commission seeks comments on how to draw specific market 
boundaries in areas of the country not located in the Arbitron Metros 
and on what factors should we consider in grouping radio stations into 
markets. The Commission proposes that radio markets be county-based. 
One alternative, if that proposal is adopted, would be to use a 
different standard in the western United States where counties are 
significantly larger. The Commission could also divide counties into 
separate radio markets in certain circumstances. Small businesses 
should benefit from a county-based system because county boundaries are 
clear, stable, and well-known, and are commonly used for market 
definition purposes (see next paragraph).
    25. The Commission also seeks comment on whether to rely on any 
pre-existing market definitions in delineating radio markets for non-
Metro areas. For example, the Commission could base its Metro 
definitions on the Metropolitan Area (MA) definitions developed by OMB. 
The Commission asks how the radio market should be define in areas that 
MAs do not cover, and notes one possible alternative would be to 
establish geographic markets based on the location, distribution, and 
density of populated areas. The Commission could also treat Cellular 
Market Areas as the relevant geographic market for radio. Both of these 
potential market definitions are county-based. We do not believe that 
the selection of one pre-defined market definition over another 
generally will have an impact on small business. We invite comment on 
this question.
    26. The market definition we establish would result in small 
business owners being subject to a market definition that is different 
than the one to which they currently are subject. As a result, the 
number of radio stations that they may own, and the number of radio 
stations that their competitors may own, under the local radio 
ownership rule may change. We encourage parties to use this opportunity 
submit specific information that would the Commission in properly 
delineating the boundaries of the local radio markets in which they are 
interested.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    27. None.
    28. Authority. This Notice of Proposed Rulemaking is issued 
pursuant to authority contained in Sections 4(i), 303, and 307 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 307, 
and Section 202(h) of the Telecommunications Act of 1996.
    29. Pursuant to the authority contained in sections 1, 2(a), 4(i), 
303, 307, 309, and 310 of the Communications Act of 1934, as amended, 
47 U.S.C. 151, 152(a), 154(i), 307, 309, and 310 and section 202(h) of 
the Telecommunications Act of 1996, this Notice of Proposed Rulemaking 
in MB Docket 03-130 is adopted.
    30. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Notice of 
Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 03-19091 Filed 7-29-03; 12:43 am]
BILLING CODE 6712-01-U