FCC Raises Red Flag

Cumulus Media's acquisition of five radio stations in the Bismarck, N.D., area will be reviewed by an FCC administrative law judge this week. The sale is the first radio deal designated for a hearing since the agency began "red flagging" mergers that result in heavy market concentration. The commissioners will order the review at their monthly meeting Thursday.

With the purchase from Anderson Broadcasting, Cumulus would own nine stations in the Bismarck area. Cumulus currently operates the Anderson stations under a management agreement. Since August 1998, the FCC has sought public comment on radio deals that lead to one or two companies dominating a market. Deals are flagged when one company would have 50% or more of radio ad revenue or two companies would share 70%. Radio owners have complained the FCC has no policy for resolving red flags and has accomplished little other than delaying mergers.

Also next week the FCC is scheduled to alter the way it defines radio markets. Some commissioners have complained that the current policy allows owners to control more outlets in a market than intended by FCC rules.