FCC Approval Seen for Bid by Univision

The Federal Communications Commission’s staff has recommended that the agency approve Univision Communications Inc.’s $2.3-billion acquisition of Dallas-based Hispanic Broadcasting Corp., according to people familiar with the situation.

Sources say the staff has concluded that the deal would pose no significant barriers to other broadcasters seeking to enter the Spanish-language market.

The recommendation is expected to be affirmed by the commission’s members as early as next week. Agency approval is the final regulatory hurdle for the deal, which was approved by the Justice Department in March.

The FCC’s three Republicans are said to be leaning toward approval, while its two Democrats are opposed.

Critics such as the National Assn. of Hispanic Publications and General Electric Co.’s rival Telemundo broadcast group have argued that a Univision-Hispanic Broadcasting combination would severely restrict competition within the Spanish-language marketplace.

Univision, based in Los Angeles, is currently the nation’s largest Spanish-TV broadcaster, with 53 stations and the Univision, Telefutura and cable-based Galavision networks. HBC is the country’s No. 1 Spanish- language radio broadcaster, with more than 55 stations.

The combined companies would be a television, radio and music behemoth commanding two-thirds of the $2.4 billion spent annually on Spanish- language media advertising in the United States. But an expanded Univision would still fall far short of exceeding the FCC’s limits on station ownership.

A Univision spokeswoman declined to comment, though company executives have argued that the company must grow to compete effectively against English-language media conglomerates such as Viacom Inc. and News Corp. Univision controls more than 80% of the Spanish-language TV audience, but its overall reach to the national audience is much smaller.

Those who oppose the deal say Spanish-language media should be considered a distinct marketplace, without regard to English-language competitors.

“The deal raises a special set of concerns about competition and diversity that are specific to Hispanics in the U.S.,” said Philip L. Verveer, a Washington lawyer who represents Spanish Broadcasting Inc., a Univision rival. “This is already a very concentrated market, and this deal will, if allowed to go through, substantially reduce both viewing and listening choices for the country’s Spanish-speaking audience.”

FCC spokesman David Fiske confirmed that the staff report on the Univision deal was circulating among commissioners for their review but declined to comment further.

More than a month in the making, the report was delayed by requests from at least one commissioner that the staff examine whether the deal would make it more difficult for others to enter the Spanish-language broadcasting market.

The FCC staff concluded that there were no significant barriers after conducting a study that found that more than 163 radio stations had converted from English to Spanish in one recent four-year period, while only 77 stations switched from Spanish to English.

On Capitol Hill, the Univision-Hispanic Broadcasting deal has generated opposition from some prominent Democrats who have expressed concern that Univision Chief Executive A. Jerrold Perenchio, a big fund-raiser for President Bush, might use his media properties to wield influence with Latino voters. Senate Minority Leader Tom Daschle (D-S.D.) complained in a May 6 letter to FCC Chairman Michael K. Powell that approval of the merger “could significantly impact public debate.”