Investors stung by the stock price plunge which followed Cumulus' restatement of financial results last month may find some solace in learning that both Executive Chairman Richard Weening and Executive Vice Chairman Lew Dickey Jr. made large stock purchases about a month and a half before the plunge. According to the company's 10-K, Cumulus made loans of just under $5M each to the two executives on 2/2 to exercise options and purchase 128K shares each of Class C stock at $39 per share, which was then the market price. Class C shares have the same value as the publicly traded Class A shares, but ten times the voting power. The value of the stock each purchased has since dropped to about $1.44M, but their $5M loans must be repaid, with interest, on 12/31/03.
During last week's House vote on Rep. Mike Oxley's (R-OH) anti-LPFM measure, Republican supporters of the bill accused the FCC of illegally lobbying Congress by faxing papers to members, explaining why the bill should be defeated. Federal law prohibits the FCC, an independent agency, from lobbying Congress. FCC Chairman Bill Kennard has sent a letter to House Telecom Subcommittee Chairman Billy Tauzin (R-LA), defending his agency's actions. "I believe it is important to inform you that the Commission scrupulously adheres to the Department of Justice's guidance concerning" lobbying by independent agencies. According to Kennard, the DOJ’s guidelines under the Anti-Lobbying Act allows government employees to "communicate directly with members of Congress and their staffs in support of Administration or department positions." Tauzin has said that he will ask the DOJ to investigate the FCC's actions.
FCC Commissioner Gloria Tristani, displeased with last week's House vote which approved a bill to eliminate over 80% of low-power FM radio stations, has asked the Senate not to pass Rep. Mike Oxley's (R-OH) Radio broadcasting Preservation Act.
"The NAB has flexed its considerable lobbying muscle and the House of Representatives has rewarded their efforts with the passage of [Oxley's legislation], a bill designed to seriously restrict the development of low-power radio," she said in a written statement. "I hope the Senate will help us give a voice to the voiceless."
The earliest the Senate may consider the bill is next month as Congress is now on a two-week spring break.
Washington - The FCC has adopted new procedures and standards it will use to select among mutually exclusive applicants to construct new noncommercial educational (NCE) broadcast stations or to make major changes in existing facilities of such stations.
In a Report and Order, the FCC said the new process will use filing windows and a point system to select among mutually exclusive TV, FM, and FM translator applications on channels reserved for NCE use. It will be faster and less expensive than the former traditional hearing process, while continuing to foster the growth of public broadcasting as an expression of diversity and excellence. The Commission said that on channels that are not reserved for NCE use, the Commission will employ existing auction procedures to resolve application mutual exclusivity.
Under the new procedures, applicants proposing the use of a reserved channel will file their applications during "filing window" periods to be announced by public notice. The Commission will grant applications received within the window that are not mutually exclusive with other applications and that comply with Commission rules and policies in all other respects.
If the Commission receives mutually exclusive applications during a filing window, it will select the best applicants using a point system, intended to promote localism, diversity and wide availability of service.
FCC CHAIRMAN RESPONDS TO HOUSE VOTE TO CUT THE NUMBER OF COMMUNITY RADIO STATIONS BY 80%
Washington, DC--FCC Chairman William Kennard said today that he is very disappointed that the U.S. House of Representatives has voted to eliminate over 80% of the potential Low Power FM radio stations in hundreds of communities around the country with the passage of H.R. 3439.
In a statement, Kennard said, "Special interests triumphed over community interests today. While the National Association of Broadcasters frequently opposes new competitive services, I'm particularly disappointed that National Public Radio joined with commercial interests to stifle greater diversity of voices on the airwaves. I can only wonder how an organization that excels in national programming could fear competition from local programming by these tiny stations operated by churches, schools, community groups and public safety agencies."
Kennard said there should be no mistake about the implications of this bill. He said, "While it appears on the face to simply be about requiring the FCC to conduct more tests to protect existing broadcasters from interference, its practical effect is to set roadblocks and hurdles for the FCC, and for the development of low power radio, that may never be met and that only can serve to protect incumbent broadcasters from competition."
Kennard listed four reasons why the interference issue is a "red herring:"
1.The FCC has set minimum frequency separation rules for LPFM that more than protect existing broadcasters, who operate at power levels from 3,000 to 100,000 watts, from harmful interference from these small 10 and 100-watt stations operating in a service area from 1 to 3.5 miles.
2.The FCC from the beginning has pledged not to authorize low power stations in communities where there could be harmful interference to existing stations. This particularly applies to protect public radio stations that are more tightly concentrated in the lower portions of the FM band.
3.The FCC has specifically pledged to protect the Radio Reading Services that are broadcast within public radio signals.
4.There are currently 312 full power stations operating under FCC authority without third adjacent-channel protection-many of them without second adjacent-channel protection- and there have been no complaints about interference.
"I urge any House Member or Senator seriously concerned about the interference issue to review the exhaustive engineering studies that the FCC conducted during our two-year proceeding and to discuss their concerns with our frequency experts," Kennard said.ardlink: 06:11 PM
The House has ignored all urging from the FCC, the White House and most importantly the public and voted in favor of HR 3439 -- the ironically titled "Radio Broadcasting Preservation Act." The vote took place at 8:32pm and was 274 Ayes, 110 Noes and 50 non-votes. Time to get calling your Senators! Congressional members will soon be on break and reachable at their home offices, so try to call them during this period. (If you have the time, try to arrange a personal meeting with the Senator).
Not only has FCC Chairman Bill Kennard made some last minute efforts to persuade Congress to drop Rep. Mike Oxley’s (R-OH) anti-LPFM bill (H.R. 3439), but a number of leading musical artists have sent a letter to Congress, expressing their concern over killing the low-power radio service. "We see the need to ensure that a public resource like FM radio spectrum is made available to as great a diversity as possible," wrote the group which included Bonnie Raitt, the Indigo Girls, Ellis Marsalis, Jr. and Jenny Toomey. "The very fact that [the bill] has moved to this stage is an embarrassment to the American public—an embarrassment that may have to be addressed in November." Musician Ian McKaye also voiced his support for LPFM this week: "It seems to me that having more of these smaller radio stations to provide access to our kind of music can’t help but be a good thing. It would also give a voice to a lot of other people, bands and labels that exist in this country and don’t have any representation at all on the radio except for college/community radio." Oxley’s bill is expected to come up for a House vote by the end of this week.
The White House has sided with the FCC in the low-power radio controversy. The Office of Management and Budget said in a policy statement that it supports the FCC's plan to open the airwaves to as many as 1,000 microradio stations. It also said it "strongly opposes" passage of legislation that would restrict the FCC's ability to license such stations. Late last month, the House Telecommunications Subcommittee passed a bill that would sharply curb the FCC plan. The bill is expected to pass the full House today. The FCC plans to accept applications for the first microradio station in May.
On Tuesday, FCC Chairman Bill Kennard sought to assure the broadcasters here, but also chided the industry for trying to derail the initiative. "Why in the midst of all this opportunity for broadcasters have you chosen to muster your considerable resources in Washington and around the country to deny churches and schools and community-based organizations just a little piece of the broadcast pie?'' Kennard said. He questioned why the group had "squandered its goodwill at the FCC'' in its battle against low-power.
Goodwill works both ways, said National Association of Broadcasters president Edward Fritts after Kennard's address. And turning to Congress for a tiebreak, "might be the way to resolve the interference issue.''
Legislation that would severely curtail the number of low-power stations the FCC could license already is winding through the House. Floor action could come this week.
John Anderson, host of About.com's Pirate/Free Radio page, has drafted and sent faxes and letters to the Congressional members listed on his "Congressional Hall of Shame." Click the link above to read the story related to this letter. Here's a little sample of his missive:
So, even though your mind (and vote) may already be made up, I want the world to know what you've done: You've been added to my Congressional Hall of Shame, an online directory of every Representative and Senator who's agreed to support H.R. 3439 or S. 2068.
The Hall of Shame is sorted by State, so your constituients can easily find you. I've also included your picture, a link to your website, and your latest campaign finance information - including any information on direct donations you've received from the NAB.
With just a few clicks, a voter can find out what you look like, how to contact you, and decide whether or not you've been peddling power for money.
Here's the latest list of radio buyouts in the last few weeks:
Cumulus Buys KYUL in Harker Heights, Texas for $2.25 million. The company also acquired WGLF (FM) in Tallahassee, Florida from Tallahassee Broadcasting Company for $4.0 million. Assuming the completion of all pending acquisitions, Cumulus Media will own and operate 321 radio stations in 64 U.S. media markets.
Infinity Broadcasting Corporation announced that it has agreed to acquire radio stations KTFM-FM and KTSA-AM in San Antonio for approximately $90 million in class A Infinity stock. Infinity Broadcasting Corporation operates more than 160 radio stations, as well as Infinity Outdoor and TDI, the Company's outdoor advertising businesses. Infinity also manages and holds an equity position in Westwood One, Inc. Infinity Broadcasting Corporation is a majority-owned subsidiary of CBS Corporation.
Radio One Inc. said it will acquire 21 stations from three companies for more than $1.36 billion. Radio One announced that it has entered into an agreement to acquire Davis Broadcasting, Inc. for approximately $24.0 million in cash and stock. The radio stations being acquired from Davis Broadcasting are as follows: WCCJ-FM (Charlotte), WAKB-FM, WAEG-FM, WAEJ-FM, WFXA-FM and WTHB-FM (Augusta). The radio stations being acquired from Clear Channel and AMFM are as follows: KKBT-FM (Los Angeles), KMJQ-FM and KBXX-FM (Houston), KBFB-FM (Dallas), WZAK-FM and WJMO-AM (Cleveland), WVCG-AM (Miami), WQOK-FM, WFXK-FM, WFXC-FM and WNNL-FM (Raleigh) and WJMZ-FM (Greenville, South Carolina).
Saga Communications, Inc. announces acquisition of WKIO-FM in Champaign-Urbana, Illinois for $7 million. The company owns or operates broadcast properties in 16 markets, including 28 FM and 17 AM radio stations, 2 state radio networks, 1 farm radio network, 5 TV stations and an equity interest in 6 FM radio stations serving Reykjavik, Iceland.
Radio Unica Communications Corp. announced that it has agreed to acquire radio station KVJY-AM 840 in McAllen, Texas.
The National Association of Broadcasters ("NAB") has led a scare campaign against low power radio. On January 20, 2000, after a year of intensive analysis, the Federal Communications Commission created a new low power radio service. The House Subcommittee on Telecommunications, Trade, and Consumer Protection recently held a hearing addressing the technical aspects of the FCC's low power radio service. Significant misinformation is being delivered to members of Congress and the public by opponents to low power radio. This information sheet addresses technical and other issues.
http://www.mediaaccess.org/programs/lpfm/2pager.html
STATEMENT OF FEDERAL COMMUNICATIONS COMMISSION CHAIRMAN WILLIAM E. KENNARD ON LOW POWER FM RADIO
Today's action by the House Commerce Committee would eliminate 75% of the opportunities for schools, churches, transit authorities, local governments, volunteer fire departments and other community and civic groups to have access to the public's airwaves. Those who want to silence Low Power FM radio are ignoring a strong, substantive, methodically-developed, two-year public record replete with solid engineering analysis.
As someone who began my career in college radio, I would never authorize or approve a new radio service that causes harmful interference to existing broadcasters. The only real interference to Low Power FM radio is from high priced Washington lobbyists.
Action Taken: H.R. 3439 RADIO BROADCASTING PRESERVATION ACT OF 2000, was ordered reported, amended, by a voice vote.
The following amendment was offered:
An amendment in the nature of a substitute by Mrs. Wilson, #1, prescribing third adjacent channel protections on the FM radio dial, requiring Congressional authority for future changes to these protections, mandating the FCC to conduct a pilot program administered by an independent testing entity to test whether low power FM radio stations will result in harmful interference to existing FM radio stations, if third channel protections are not in place, and requiring the FCC to report its findings to Congress by February 1, 2001, was AGREED TO by a voice vote.
FCC Chairman William Kennard has pointed out that commercial broadcasters have a history of resisting new uses of the broadcast spectrum and citing alleged technical problems to stall them. If low-power radio causes problems, the commission will be politically accountable. But if the FCC--the agency charged with protecting the integrity of the spectrum--is persuaded that micro-radio will not cause difficulties, this potentially useful area should be allowed some space to grow.