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FCC OKs "red flag" radio deals

The federal government approved sales of 62 radio stations Monday, clearing most of a backlog created by the FCC's practice of "red flagging" radio deals that result in the heavy concentration of local ad revenues.

The agency began the controversial practice in 1998. Competitors and the public were asked to comment on the flagged deals' impact in their markets. Unfortunately, the FCC never spelled out any procedures for resolving the mergers and several buyers withdrew applications rather than sit out the indefinite wait.

FCC Chairman Michael Powell said delays created by flagging were unacceptable and ordered the Mass Media Bureau to approve sales that could be judged on the precedents of prior merger approvals. "I do not believe the public interest is served by inaction," he said.

Of the 64 station sales approved, they involve 32 separate deals in 26 markets. There are 11 red-flagged deals still pending, two of which are being reviewed by the Justice Department.

National Association of Broadcasters President Eddie Fritts called the FCC's decision "welcome news." Commissioner Harold Furchtgott-Roth called the flagging process "government at its worst."

Commissioner Susan Ness agreed that many of the deals had been pending too long and said it was time to move them forward, but stressed that the FCC needs to quickly settle rulemakings that would make it easier to judge when mergers lead to too much local concentration, especially in small markets. "Consumers in Charleston are just as entitled to robust markets as those who live on the Charles," she said.

Commissioner Gloria Tristani, however, said the agency approved too many of deals and should have designated many for hearing before an agency administrative law judge. - Bill McConnell