ADX Communications of Pensacola v. FCC.

• Position: Radio licensing

ADX COMMUNICATIONS OF PENSACOLA V. FCC

794 F.3d 74 (D.C. Cir. 2015)

In ADX Communications of Pensacola v. FCC, (1) the United States Court of Appeals for the District of Columbia Circuit upheld the FCC's decision not to deviate from its current market definition methodology for radio station markets when it assigned radio licenses to one of ADX's local competitors in the Mobile, Alabama and Pensacola, Florida markets. The D.C. Circuit also found that the FCC did not act arbitrarily when it did not submit the competitor to a two-year waiting period. (2)

1. BACKGROUND

   Pursuant to Section 307 of the Communications Act, (3) the FCC regulates radio stations by awarding licensing or approving license transfers. (4) The FCC awards licenses or approves license transfers based on public interest, convenience, and necessity. (5) To these ends, the FCC caps the number of stations a licensee may own in a given market. (6)

   The FCC's method for determining the size of a local market has changed since 2003. (7) Previously, the FCC used the "contour overlap method," which based the boundaries of a radio station's market on certain geographic considerations and the station's signal strength. (8) Due to the flaws of the contour overlap method, (9) the FCC changed to a method developed by Arbitron, a private data collection company. (10) Under Arbitron's methodology, major metropolitan areas are assigned markets labeled as "Arbitron Metro Survey Areas," or "Arbitron Metros." (11) Each radio station is also assigned a "home" Metro, which is based on either the community that the station is licensed to serve or if a station licensed elsewhere competes with stations in that same Metro. (12) The Arbitron method still applies the previous contour overlap method under certain circumstances. (13)

   Interested parties may petition to bar another license applicant from acquiring a license if the interested party can present a prima facie showing that the license acquisition would be against public interest. (14) Additionally, when Arbitron changes a market definition, the FCC applies a two-year waiting period before a radio station owner can take advantage of the new market definition. (15)

   In 2012, Cumulus Licensing LLC (Cumulus) applied for radio station licenses in the Pensacola and Mobile Metros. (16) To ensure that it would only need to satisfy the newer Arbitron-based methodology, Cumulus proposed transferring some of its licenses to new owners and shifted the...