Conditional Logit Analysis of FCC Decisionmaking

The FCC's 1965 policy statement concerning decisions in comparative broadcast licensing cases was a response to criticisms that the process was arbitrary and unrelated to the applicants' comparative merits. Subsequent decisions presumably based on the stated criteria have continued to be attacked. Most of the criticisms, however, are founded on anecdotal analyses rather than on systematic statistical results. Conditional logit analysis of the FCC's revealed preferences indicates that the FCC has done better than the critics have realized. Those criteria which are stated to be most important are indeed those which are statistically significant in the decision functions: specifically, the integration of ownership with management and the diversification of mass media ownership. Furthermore, there is little difference between the decision functions of initial and review level decisionmakers.