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                                Before the
                    FEDERAL COMMUNICATIONS COMMISSION
                             Washington, D.C.



In Re Applications of

Triathlon Broadcasting Company          

and

Capstar Radio Broadcasting
Partners, Inc.

For Consent to Assignment of
Licenses of Stations

KFH-AM, Wichita, Kansas
KQAM-AM, Wichita, Kansas
KWSJ-FM, Haysville, Kansas
KRBB-FM, Wichita, Kansas
KEYN-FM, Wichita, Kansas
KZSN-FM, Hutchinson, Kansas


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File Nos.
BTC-980821EE
BTC-980821EF
BTC-980921EG
BTCH-980821EH
BTCH-980821EI
BTCH-980821EJ


      To: Chief, Mass Media Bureau

                    COMMENT AND PETITION FOR HEARING

Joel I. Klein
Assistant Attorney General
Donna E. Patterson
Deputy Assistant Attorney General
Susan M. Davies
Senior Counsel
Constance K. Robinson
Director of Merger Enforcement
and Director of Operations
Craig W. Conrath
Chief, Merger Task Force
Reid B. Horwitz
Assistant Chief, Merger Task Force
Karl D. Knutsen
Joan Farragher
Attorneys
U.S. Department of Justice
Antitrust Division
1401 H Street, N. W., Suite 4000
Washington, D.C. 20530-0001
(202) 514-0976





      Date: October 19, 1998


Page 2      

TABLE OF CONTENTS
Page
Summary
I. Introduction 1
II. The Parties 2
III. The Proposed Acquisition 3
IV. The Commission Properly May Consider Antitrust Issues, Under the Communications Act, in Approving the Transfer of a Station License. 4
V. Radio Advertising is the Relevant Product Market in Which to Analyze the Competitive Effects of the Proposed Transaction. 7
VI. The Geographic Market is the Wichita, Kansas Metro Market or the Three County Metro Market of Butler, Harvey and Sedgwick Counties. 8
VII. Capstar's Proposed Acquisition Should Be Designated for Hearing Because it Presents Issues of Material Fact as to Whether It Contrary to the Public Interest Because It Will Enable Capstar to Control Almost Half of the Advertising Revenues and Demographic Shares in Wichita, Thereby Reducing Competition. 10
VIII. Conclusion 13




.


Page 3      

                              SUMMARY


           The Department of Justice of the United States of America ("Department") submits this
      Comment and Petition for Hearing to the Federal Communications Commission ("Commission")
      in connection with the Commission's request for comment on Capstar Broadcasting Partner
      Inc.'s ("Capstar") proposed acquisition of Triathlon Broadcasting Company ("Triathlon").
           Capstar currently owns KKRD-FM, KRZZ-FM, and KNSS-AM in Wichita, Kansas.
      Triathlon currently owns six radio stations in Wichita: KZSN-FM, KRBB-FM, KEYN-FM,
      KWSJ-FM, KFH-AM, and KQAM-AM. Although Capstar acknowledges in its Commission
      filing that it must divest two FM stations, its share of market revenue would still be over 45%
      after it divests the two least significant FM stations. In addition, Capstar and Triathlon may
      even be closer competitors than their revenue shares suggest because their combined share of
      certain demographic groups would exceed 50% -- even after it divests the two least significant
      FM stations. These levels of concentration raise substantial and material questions of fact as to
      whether the transaction is anticompetitive.
           The Commission has the responsibility under Section 310(d) of the Communications Act,
      47 U.S.C. § 310(d), to consider antitrust issues in approving the transfer of a station license.
      Under such a public interest evaluation, Capstar's proposed acquisition of Triathlon's station
      licenses presents a number of issues of material fact as to whether the proposed transaction is
      anticompetitive and will lead to higher prices for radio advertising in Wichita, Kansas. Because
      the transfer of Triathlon's stations raise serious issues as to whether sufficient competition will
      exist after the acquisition, the Department believes that the Commission should hold a hearing
      and determine whether the transfers serve the public interest.



Page 4      

                               Before the
                    FEDERAL COMMUNICATIONS COMMISSION

                             Washington, D.C.




In Re Applications of

Triathlon Broadcasting Company          

and

Capstar Radio Broadcasting
Partners, Inc.

For Consent to Assignment of
Licenses of Stations

KFH-AM, Wichita, Kansas
KQAM-AM, Wichita, Kansas
KWSJ-FM, Haysville, Kansas
KRBB-FM, Wichita, Kansas
KEYN-FM, Wichita, Kansas
KZSN-FM, Hutchinson, Kansas


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File Nos.
BTC-980821EE
BTC-980821EF
BTC-980921EG
BTCH-980821EH
BTCH-980821EI
BTCH-980821EJ


      to: Chief, Mass Media Bureau


                    COMMENT AND PETITION FOR HEARING


      I.   Introduction
           On September 18, 1998, the Federal Communications Commission ("Commission")
      announced its concerns relating to increased concentration created by the proposed transfers of
      the above-mentioned licenses by issuing a public notice requesting comments on the transfers,
      stating:
           Based on our initial analysis of this application and other publicly available


Page 2      

           information . . . the Commission intends to conduct additional analysis of the
           ownership concentration in the relevant market. This analysis is undertaken
           pursuant to the Commission's obligation under section 310(d) of the
           Communications Act, 47 U.S.C. section 310 (d), to grant an application to
           transfer or assign a broadcast license or permit only if so doing serves the public
           interest, convenience and necessity.

      Broadcast Applications, FCC Report No. 24329, at 6 (1998).
           In response to the Commission's notice, the United States Department of Justice
      ("Department") submits this Comment and Petition. The Department is charged with enforcing
      the antitrust laws under the Sherman Act, 15 U.S.C. § 4, and under the Clayton and Hart-Scott-
      Rodino Acts, 15 U.S.C. §§ 9, 18a(f), and 25. Pursuant to the discharge of these duties, the
      Department has begun an investigation of the merger that would result in the proposed license
      transfers. Based upon this review, the Department believes the proposed grant of Triathlon
      Broadcasting Company's ("Triathlon") applications and subsequent consummation of the
      transactions raise substantial and material questions of fact as to whether the license transfers
      would be anticompetitive. The Department therefore believes that it would be appropriate for
      the Commission to conduct a hearing pursuant to Section 310(d) of the Communications Act, 47
      U.S.C.§ 310 (d), to examine whether the acquisition is in the public interest. The Department
      will complete its investigation into the potential anticompetitive nature of the proposed
      acquisition and may bring an action in United States District Court if it concludes that the
      proposed acquisition violates the antitrust laws and is likely to have an anticompetitive effect on
      the market for radio advertising in Wichita, Kansas.

      II. The Parties
          Capstar Radio Broadcasting Partners, Inc. ("Capstar") is the fourth largest radio
      broadcaster in a rapidly consolidating radio broadcasting industry. According to industry


Page 3      

      estimates, Capstar currently owns approximately 300 radio stations in 75 markets in the United
      States.1 The Capstar stations generate annual combined revenues of approximately $350
      million. Capstar revenues in 1997 from KKRD-FM [Wichita], KRZZ-FM [Derby] and KNSS-
      AM [Wichita] in Butler, Harvey and Sedgwick counties totaled $4.96 million.2 KKRD has a
      Class C1 signal while KRZZ has a Class C2 signal. Broadcast coverage maps are attached to
      this Petition as Exhibit B.
         Triathlon Broadcasting Company ("Triathlon") owns or operates approximately 35 radio
      stations located in seven markets in the United States. Its licensee, Triathlon Broadcasting of
      Wichita Licensee, Inc., holds the licenses for the following six stations in Butler, Harvey and
      Sedgwick counties: KFH-AM, Wichita, Kansas, KQAM-AM, Wichita, Kansas, KWSJ-FM,
      Haysville, Kansas, KRBB-FM, Wichita, Kansas, KEYN-FM, Wichita, Kansas and KZSN-FM,
      Hutchinson, Kansas. All four FM stations have Class C signals. Triathlon's revenue in 1997 was
      approximately $33.6 million, about $8 million of which was derived from sales by its Wichita-
      based radio stations.

      III. The Proposed Acquisition
         On or about July 23, 1998, Capstar and Triathlon entered into an Agreement and Plan of
      Merger ("Agreement"). Under the terms of the Agreement, Triathlon agreed to transfer its


Page 1      

      licensee companies, including Triathlon Broadcasting of Wichita Licensee, Inc., to Triathlon
      Broadcasting Company. Also under the terms of the Agreement, Triathlon agreed to sell
      Triathlon Broadcasting Company to Capstar. Capstar has not yet consummated the acquisition
      of the Wichita stations.
           Capstar acknowledges that it must divest two FM stations for Commission purposes.
      Application for Consent to Transfer of Control of Corporation Holding Broadcast Station
      Construction Permit or License, Capstar Radio Broadcasting Partners, Inc., Transferee, Response
      to Section II, Question 7, Exhibit 7, at 3. The application does not indicate which stations will
      be divested. Id., at 4. For the purposes of this petition, the Department has assumed that
      Capstar will divest the two FM stations generating the smallest revenues: KWSJ-FM ($450,000)
      and KEYN-FM ($1,400,000).

      IV.  The Commission Properly May Consider Antitrust Issues, Under the
           Communications Act, in Approving the Transfer of a Station License.

           Section 310(d) of the Communications Act provides that the Commission shall determine
      whether applicants seeking a transfer of licenses have demonstrated that granting such
      application serves the public interest:
           No . . . station license . . . shall be transferred . . . except . . . upon finding by
           the Commission that the public interest, convenience, and necessity will be served
           thereby.

       47 U.S.C. § 310(d). The applicable regulations state that the Commission will make the grant
      on the application, pleadings and materials that it may notice if it finds that
           the application presents no substantial and material question of fact and
           meets the following requirements:
                                *  * *
               (4) A grant of the application would otherwise serve the public interest,
               convenience and necessity.


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      47 C.F.R. 73.3591(a) (emphasis added). If the Commission is unable to make the specified
      findings based upon a written record, it will designate the application for hearing. 47 C.F.R.
      73.3593.
           It is well established that the Commission may consider antitrust concerns when
      evaluating whether the public interest is being served. The United States Supreme Court has
      repeatedly recognized that antitrust concerns are a relevant part of the Commission's public
      interest inquiry under the Communications Act. See Federal Communications Comm'n v.
      National Citizens Committee for Broadcasting,
436 U.S. 775, 795 (1978) (noting that the
      Commission may properly consider antitrust issues and collecting cases); United States v. RCA,
      358 U.S. 334, 351 (1959) (observing that in certain cases the Commission may find that antitrust
      considerations alone would prevent the public interest standard from being satisfied); Federal
      Communications Comm'n v. RCA Communications, Inc
., 346 U.S. 86, 94 (1953) (noting that
      "[t]here can be no doubt that competition is a relevant factor in weighing the public interest");
      National Broadcasting Co. v. United States, 319 U.S. 190, 222-23 (1943) (holding that the
      Commission may consider the effect of a broadcast license applicant's anticompetitive conduct
      on the public interest).
           More recently, the United States Court of Appeals for the District of Columbia Circuit
      has repeated that the Commission must consider competitive concerns. Specifically, the D.C.
      Circuit has held that the Commission must "make findings related to the pertinent antitrust
      policies, draw conclusions from the policies, and weigh these conclusions along with other
      important public considerations." United States v. Federal Communications Comm'n, 652 F.2d
      72, 82 (D.C. Cir. 1980) (en banc) (quoting Northern Natural Gas Co. v. Federal Power


Page 6      

      Comm'n, 399 F.2d 953, 961 (D.C. Cir. 1968)).3 See also Rogers Radio Communication
      Services, Inc. v. Federal Communications Comm'n
, 593 F.2d 1225, 1230 (D.C. Cir. 1978)
      (noting that the "[e]ffect on competition [is] clearly a proper factor for the Commission to
      consider under the public interest, convenience, and necessity standard . . . ."); Home Box Office,
      Inc. v. Federal Communications Comm'n
, 567 F.2d 9, 41 n.68 (D.C. Cir. 1977) (noting that
      "there can be no question that the commission can properly consider antitrust issues" and
      collecting cases).
           The public interest standard of Section 310(d) is a flexible one that encompasses the
      "broad aims of the Communications Act." Application of WorldCom, Inc. and MCI
      Communications Corp. for Transfer of Control of MCI Communications Corp. to WorldCom,
      Inc.,
Memorandum Opinion and Order, FCC 98-225, ¶ 9 (1998) ("WorldCom/MCI Order").
      Among these broad aims is to realize Congress's desire to implement a "pro-competitive, de-
      regulatory national policy framework designed to . . . open[] all telecommunications markets to
      competition . . . ." WorldCom/MCI Order, ¶ 9 (quoting H.R. Rep. No. 104-458 at 1; Preamble
      to Pub. L. No. 104-104, 110 Stat. 56 (1996)).


Page 7      

           Since Congress passed the Telecommunications Act of 1996, the Commission has
      routinely integrated concerns about antitrust issues into its public interest examination of
      mergers by considering antitrust principles as part of its public interest assessment. In analyzing
      the competitive effects of a proposed merger, the Commission does not attempt to determine
      whether mergers violate specific antitrust laws -- though it specifically retains the right to do so.
      Instead, the Commission considers more general antitrust or competitive issues as part of its
      public interest assessment. See WorldCom/MCI Order, ¶ 15; Applications of NYNEX Corp.,
      Transferor, and Bell Atlantic Corp., Transferee, For Consent to Transfer Control of NYNEX
      Corp. and Its Subsidiaries,
Memorandum Opinion and Order, 12 FCC Rcd 19985, 20008, ¶ 37
      (1997) ("Bell Atlantic/NYNEX Order"); In the Matter of the Merger of MCI Communications
      Corp. and British Telecommunications PLC,
Memorandum Opinion and Order, 12 FCC Rcd
      15351, 15367, ¶ 33 (1997) ("BT/MCI Order"). The Commission has created this framework
      using the principles embodied in the United States Department of Justice/Federal Trade
      Commission Horizontal Merger Guidelines, as revised ("Merger Guidelines"); existing antitrust
      case law; and past Commission analyses of market power. See WorldCom/MCI Order, ¶ 15;
      Bell Atlantic/NYNEX Order, 12 FCC Rcd at 200008, ¶ 37; BT/MCI Order, 12 FCC Rcd at
      15367, ¶ 33.

      V.  Radio Advertising is the Relevant Product Market in Which to Analyze the
           Competitive Effects of Capstar's Proposed Acquisition.


           Radio has unique advantages over other forms of media that make another radio station a
      closer substitute for a specific radio station than other media. Unlike other media, radio is
      exclusively sound-based. Affidavit of Dr. Sean F. Ennis, ¶ 14 ("Ennis aff." attached as Exhibit


Page 8      

      C). Second, radio allows advertisers to narrowly focus on specific demographic groups (e.g.,
      women ages 18-49) that are attractive to many advertisers. Id. Third, radio is typically
      inexpensive enough to allow an advertiser to build repetition or frequency through its advertising
      at a reasonable price. Id. Fourth, the cost of producing a radio commercial is much lower than
      producing a television commercial, id., thus allowing advertisers to change advertisements more
      often. Fifth, radio allows for very fast turnaround of advertising copy. Id. Sixth, radio is
      portable can therefore reach people driving in their cars. Id.
           As a result of these unique characteristics of radio, advertisers will often consider one
      radio station, rather than an alternate form of media, as the closest substitute for another radio
      station. Id., ¶ 15. Radio stations are also aware that one radio station is the closest substitute for
      another radio station; therefore, they tend to set the price of their radio advertising time based
      upon prices charged by other radio stations -- rather than those of alternative media. Id., ¶ 16.
           The price for radio advertising time is generally individually negotiated between a radio
      station and an advertiser. An advertiser will typically contact the stations upon which it would
      consider advertising and will receive price quotes that may include added value such as
      promotions, sponsorships, live reads, and remote broadcasts that many advertisers find attractive.
       After receiving its quotes -- and perhaps contacting the stations to conduct further negotiations --
       the advertiser will determine the stations upon which it will place its advertising. Id., ¶ 22.

      Inherent in this process are individually negotiated prices (in economic terms, "price
      discrimination") -- a process by which radio stations charge different prices for the same
      advertising spot to different advertisers depending upon how efficient the spot is for an
      advertiser's demographic target and the degree to which the advertiser needs to advertise on that
      specific radio station. Id., ¶ 23.


Page 9      


      VI.  The Geographic Market is Wichita, Kansas or the Three County Metro Market of
           Butler, Harvey and Sedgwick Counties.


           The Department's initial investigation suggests that Wichita, Kansas and/or Butler,
      Harvey and Sedgwick counties constitute a relevant geographic market within which to assess
      the competitive effects of the proposed acquisition. Three factors are especially relevant in
      determining the relevant geographic market in this matter: industry recognition, geographic
      coverage of broadcast signals, and customer demand.
           First, the professional radio trade services treat the three county area as a distinct
      economic unit. BIA reports which radio stations are contained in a metro market and defines the
      Wichita metro area as Butler, Harvey, and Sedgwick counties. See generally BIA. Whether an
      advertiser would consider buying radio time on a certain station in order to reach that
      advertiser's target geographic audience is an important factor in determining the relevant
      geographic market. See Ennis aff., ¶ 26. The fact that the industry recognizes an area as a
      relevant geographic market is significant because it generally identifies the radio stations within
      that geographic market which media buyers would consider close substitutes. Id. In addition,
      the Arbitron rating service will generally allow a radio station to declare itself as belonging to
      only one home geographic market. Stations therefore will generally declare their home market
      as the one from which they believe they will attract the most advertisers. Id, ¶ 25. The fact that
      both industry trade groups indicate that Wichita, Kansas is a distinct geographic market is an
      important indication that it may be a geographic market for antitrust purposes.
           Second, examining population density and contour maps of stations' signal strength
      reveals that the three county metro area constitutes the core of the listening audience. According
      to BIA industry statistics, the Wichita metro market is the 89th largest metro market in the
      United States in terms of population. BIA, at 382. The population of the Wichita metro market


Page 10      

      is concentrated in Sedgwick county, with approximately 423,700 residents, including the city of
      Wichita. Id. The adjacent counties of Harvey and Butler contain relatively smaller populations
      of 31,900 and 58,900, respectively. Id. Moreover, the Wichita metro market is isolated from
      other densely populated areas surrounding the metro area. Few Wichita consumers, therefore,
      listen to radio stations from other areas. The closest cities to Wichita are Hutchinson, Kansas
      (59 miles away), Salina, Kansas (92 miles), topeka, Kansas (140 miles), Kansas City, Missouri
      (188 miles), and Joplin, Missouri (211 miles). Rand McNally Road Atlas, at 36 (1998 ed.).
           Third, and perhaps most importantly, radio advertisers customarily recognize and rely
      upon industry geographic distinctions in making their purchasing decisions. Ennis aff., ¶ 26.
      Thus advertisers wishing to reach radio audiences in the Wichita metro region must advertise on
      radio stations in the Wichita metro market rather than on stations in distant cities that do not
      reach Wichita and to which Wichita consumers generally do not listen.

      VII. Capstar's Proposed Acquisition Should Be Designated for Hearing Because it
           Presents Issues of Material Fact as to Whether It Is Contrary to the Public Interest
           Because It Will Enable Capstar to Control Almost Half of the Advertising Revenues
           and Demographic Shares in Wichita, Thereby Reducing Competition.


           Capstar currently controls 20.3% and Triathlon controls 32.8% of Wichita metro market
      radio advertising revenues. If the combined entity were to divest only the two least significant
      FM radio stations to meet the Commission's guidelines, Capstar would still have a market share
      of 45.5%.4


Page 11      

           In addition, the Wichita radio market is already concentrated. The level of
      concentration in the Wichita radio market is similar to that where courts have presumed antitrust
      violations. Courts presume a transaction challenged under Section 7 of the Clayton Act, 15
      U.S.C. § 18, to be illegal if the government can show that the combined entity would have a
      significant market share in a concentrated market. United States v. Philadelphia Nat'l Bank, 374
      U.S. 321, 363 (1963); Federal Trade Comm'n v. University Health, Inc., 938 F.2d 1206, 1218
      (11th Cir. 1991). In Philadelphia Nat'l Bank, the Supreme Court held that a merger resulting in
      a single firm controlling 30% of a market in which four firms had 78% of the sales was
      presumptively illegal, calling the merger inherently likely to lessen competition substantially.
      Philadelphia Nat'l Bank, 374 U.S. at 364. Similarly, in United States v. Continental Can Co.,
      378 U.S. 441, 461 (1964), the Court found a merger presumptively illegal where the combining
      firms' aggregate market share was 25%, the acquired firm's pre-merger share was 3.1%, and the
      leading four firms accounted for 64.7% of the relevant market.
           A growing number of courts, including those in the District of Columbia Circuit, have
      relied upon the Merger Guidelines' approach for assessing pre- and post-merger concentration
      through use of the Herfindahl-Hirschman Index ("HHI"). See, e.g., Federal Trade Comm'n v.
      PPG Indutries, Inc.
, 798 F.2d 1500, 1503 n.4 (D.C. Cir. 1986) (noting that the Merger
      Guidelines provide a useful illustration of the application of the HHI); Federal Trade Comm'n
      v. Cardinal Health Care
, Inc., 12 F. Supp.2d 34, 53 (D.D.C. 1998) (stating that while the
      Merger Guidelines are not binding, they constitute the agencies' informed judgment on the area
      of their expertise; accordingly, the courts have turned to the Merger Guidelines for assistance
      and over the years have come to accept the HHI as the most prominent and accurate method of
      measuring market concentration); Federal Trade Comm'n v. Staples, Inc., 970 F. Supp. 1066,


Page 12      

      1082 (D.D.C. 1997) (noting that the Merger Guidelines are useful and provide guidance). The
      HHI for a market is calculated by summing the squares of the individual market shares of all
      firms participating in the market. Merger Guidelines, ¶ 1.5.
           Under the Merger Guidelines' approach, markets with an HHI below 1000 are deemed
      unconcentrated; those with an HHI between 1000 and 1800 are moderately concentrated; and
      those with an HHI above 1800 are termed highly concentrated. Id., ¶ 1.5. In cases where the
      post-merger market is highly concentrated, and an acquisition would result in an increase of
      more than 100 points in the HHI, the acquisition is presumed to be likely to create or enhance
      market power or facilitate its exercise. Id. For example, the court in Staples found that the
      proposed merger would increase the HHI by an average of 2715 points in already highly
      concentrated markets, and thus the FTC had shown a "reasonable probability" that the proposed
      merger would have an anti-competitive effect. Staples, 970 F. Supp. at 1082. Similarly, in
      Cardinal Health, the court found that an increase in HHI from 1648 to 2450 (802 points)
      brought about by one proposed merger, and from 1648 to 2277 (629 points) brought about by a
      second proposed merger, required the court to presume that the proposed mergers pose a risk to
      competition. Cardinal Health, 12 F.Supp.2d at 53.
           In this case, the market is already concentrated. The second largest radio company in
      Wichita -- Great Empire -- directly controls 35.5% of the market. Great Empire further
      maintains a joint selling agreement with Violet, Viola and Gary -- owners of KDGS and KAYY
      with 3.7% of the market. Counting post-acquisition Capstar and Great Empire's joint selling
      arrangement, the two largest radio companies in Wichita would control 84% of the market.
      Currently, the HHI is 3040. If Triathlon divests only the two least significant FM stations, the
      post-merger HHI would be 3680, representing an increase of 640 points. Ennis aff., ¶ 9. This


Page 13      

      level of concentration is higher than that in either merger in Cardinal Health, and presents
      "substantial and material reasons to believe that the merger may reduce competition among radio
      stations that serve Wichita." Id., ¶ 5.
           In addition, if Capstar divests only the two least significant FM stations, it will control
      over 50% of key demographic groups that many advertisers are interested in reaching. For
      example, Capstar currently controls 24.6% of the adults ages 25-54 demographic while Triathlon
      controls 39.6% of this demographic. Id., ¶ 32. If the acquisition proceeds, Capstar would
      control 54.0% of this demographic. Id. This level of control would make it difficult for
      advertisers seeking to reach many listeners, but also attempting to avoid Capstar stations, to do
      so. Id. Advertisers would thus have fewer choices on where to place radio advertising, id., ¶¶
      11 & 32, and may therefore have to pay higher prices.

      VIII. Conclusion
           Capstar and Triathlon propose a merger that would result in a highly concentrated
      market. After an initial review, the Department believes that the proposed transaction raises
      substantial and material issues of fact as to whether the proposed transaction is anticompetitive
      because of the currently concentrated Wichita radio market, the increase in concentration that the
      merger creates, and Capstar's potential control over important demographic groups. The
      Department therefore believes that the Commission should fully investigate whether the
      acquisition serves the public interest by designating a hearing. The Department, meanwhile, will


Page 14      



      Respectfully Submitted,


      Joel I. Klein
      Assistant Attorney General


      Donna E. Patterson
      Deputy Assistant Attorney General

      Susan M. Davies
      Senior Counsel


      Constance K. Robinson
      Director of Merger Enforcement and Director of Operations




                 /s/          
      Craig W. Conrath, Chief
      Reid B. Horwitz, Assistant Chief
      Merger Task Force



                 /s/          
      Karl D. Knutsen
      Joan Farragher
      Atorrneys
      Merger Task Force

      Dated: October 19, 1998

      U.S. Department of Justice
      Antitrust Division
      1401 H Street, N.W.
      Washington, D.C. 20530
      (202) 514-0976




Page 15      



                         CERTIFICATE OF SERVICE


      I, Rex Y. Fujichaku, of the Antitrust Division of the United States Department of Justice,
      do hereby certify that true copies of the foregoing Comment and Petition for Hearing were
      served this 19th day of October, 1998, by hand delivery, to the following:

      Roy J. Stewart, Esq.
      Chief, Mass Media Bureau
      Federal Communications Commission
      1919 M Street, N.W., Room 314
      Washington, D.C. 20554

      Colette M. Capretz
      Fisher Wayland Cooper Leader & Zaragoza L.L.P.
      2001 Pennsylvania Avenue, N.W.
      Washington, D.C. 20006
      Counsel for Triathlon Broadcasting Company

      Nathaniel Emmons
      Wiley, Rein & Fielding
      1776 K Street, N.W.
      Washington, D.C. 20006
      Counsel for Capstar Broadcasting Partners, Inc.






                                                                                                                            /s/               
                                                                                                                Rex Y. Fujichaku


FOOTNOTES


1 These figures are for Capstar only. Capstar and Chancellor Media Company have announced plans to merge. Chancellor is a sister company of Capstar with whom it has common shareholders. Alejandro Bodipo-Memba and Carlos Tejada, Hicks-Muse to Combine Big Radio Firms, Wall St. J., August 28, 1998, at A3. If the merger proceeds, the combined entity will own 463 stations in 105 markets. Id.

2 Revenue figures for each station are derived from BIA, Investing in Radio Market Report Š98, 3rd ed. ("BIA") (attached as Attachment A).

3 The District of Columbia Circuit's reliance upon Northern Natural Gas in Federal Communications Comm'n is further support for the proposition that regulatory agencies should generally consider antitrust issues when evaluating the public interest. See, e.g., Federal Maritime Comm'n v. Aktiebolaget Svenska Amerika Linien, 390 U.S. 238, 245-46 (1968) (approving the Federal Maritime Commission's conclusion that antitrust violations constituted substantial evidence that steamship agreement was contrary to public interest); McLean Trucking Co. v. United States, 321 U.S. 67, 86-88 (1944) (holding that the Interstate Commerce Commission had a duty to consider the effect of common carrier consolidation in evaluating the public interest); United Distribution Cos. v. Federal Energy Regulatory Comm'n, 88 F.3d 1105, 1163 (D.C. Cir. 1996) (holding that FERC's power to protect competition exceeds that of the Federal Trade Commission and noting that "[a]ntitrust policies governing the FTC do not exhaust the public interest authority under which the Commission may [act]"); Northern Natural Gas Co. v. Federal Power Comm'n, 399 F.2d 953, 961 (D.C. Cir. 1968) (noting that "competitive considerations are an important element of the Špublic interest'").

4 Since Capstar must divest two FM stations to satisfy other Commission regulations relating to the number of stations that can be owned in a given market, this petition and the accompanying affidavit have assumed that the two smallest FM stations will be divested. The two smallest FM stations -- KEYN and KWSJ -- account for approximately 7.5% of market revenue.