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July 21, 2004

Source: Clear Channel to Countersue Stern, Infinity

LOS ANGELES (Reuters) - Clear Channel Communications Inc. on Wednesday plans to file suit against Howard Stern and his distributor, Infinity Broadcasting, claiming the shock jock breached his contract by airing indecent programs, a source close to the company said.

The source said Clear Channel will file a $3 million countersuit to a $10 million lawsuit filed in federal court in Manhattan by Stern's One Twelve company and Infinity.

Stern and Infinity claimed Clear Channel had broken its contract with them when it dumped Stern's show from six stations it owns following fines against Stern by the Federal Communications Commission.

Spokesmen for Clear Channel, Stern's company, and Infinity, a Viacom Inc unit, either were unavailable or declined comment.

The ribald radio host has repeatedly accused Clear Channel of strong ties to the Bush administration, saying the company previously defended him against past indecency allegations until he became critical of President Bush.

Clear Channel, the largest U.S. radio station owner, announced a zero tolerance policy for indecent antics on the air when it dropped Stern after federal regulators turned up the pressure on radio station operators for content they deemed indecent.

The source close to Clear Channel said the company felt it had to take Stern off the air because both Infinity and Stern refused to provide any assurances that there would not be further breaches.

Clear Channel will claim in its countersuit that Stern's license agreements with all six stations required the program to conform with all applicable laws and regulations, the source said.

In June, Clear Channel admitted to airing indecent material and agreed to pay a record $1.75 million penalty to settle all existing complaints.

The company also agreed to take steps to prevent further such incidents, including formalizing its "zero tolerance" policy and training employees.

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