How Far To Roll Back Radio Ownership Limits? Radio Groups Are Split

 

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As the Federal Communications Commission looks for guidance on how to go forward with its restarted quadrennial media ownership review, the feedback from broadcasters has shown there is no clear-cut consensus on how far to go. The closest the industry comes is on the AM dial, where most of the comments filed in the proceeding back broader relaxation or even outright elimination of any ownership limits. The bigger split is on the FM dial.

The National Association of Broadcasters last week said it supported eliminating all AM restrictions and only having tiered limits on FMs in the top 75 markets. The NAB called it a “balanced reform proposal.”

But radio’s largest owner, iHeartMedia, calls it “overly aggressive” and argues the NAB’s FM proposal would “open the door to significant competitive harms” because it would direct broadcasters to focus on FM rather than AM ownership. iHeart says it would also “undermine” the FCC’s incubator program. Instead, iHeart backs a “more modest” proposal that would eliminate AM caps but keep FM limits as they are today.

“Doing so will avoid the potentially catastrophic harm that could befall AM stations were the Commission to adopt the NAB proposal to deregulate substantially the FM band,” iHeart says in a filing with the FCC.

Even as it supports allowing greater AM ownership levels, iHeart says there is evidence that AM remains a viable service worth protecting. It points out that its new Black Informational Network, now airing on more than 30 AMs, is proving to be additive to existing Black-owned stations. It also presents the FCC with ratings data showing spikes in AM listening when big news breaks.

The core of iHeart’s position is based on the theory that radio only competes for radio ad dollars, taking a more narrow approach than the NAB which argues broadcasters are losing revenue to big tech companies.

The National Association of Black Owned Broadcasters agrees, saying it too opposes any changes in the local radio ownership rule, especially because many of its members have a greater exposure to AMs. “NABOB’s members will be impacted significantly if they are placed in the position of competing against group owners operating up to eight or ten FM stations in a market,” it says.

Other Radio Groups Push For Changes

The proposal laid out by iHeart is in contrast to what some broadcasters detail as rising competitive threats. Press Communications tells the FCC that among the most powerful of the forces competing against AM/FM is the satellite radio monopoly approved by the FCC in 2008, which a decade later added Pandora, which it says made the situation even worse. “It is irrefutable that a significant market share is and has been eroded from terrestrial radio because of the imbalance in competition,” says Press.

Press proposes that the FCC abolish the AM caps in markets with 45 or more stations, and in smaller markets it would give broadcasters the ability to own a few more stations – keeping the eight-station cap in big metros – while also giving more flexibility to owners in how many are AMs or FMs.

A joint filing from 10 other groups – including Townsquare Media, Connoisseur Media and Midwest Communications – goes even further. It argues for eliminating the local radio ownership limits altogether. The group says big tech siphoning local ad dollars makes it harder for local radio to pay for local news and programming, with the situation even worse than when they first proposed ending all ownership caps two years ago. “To think that a radio company owning a sixth or seventh FM station in a big market, or even all the radio stations in a smaller market, will damage competition or harm the public interest is to ignore reality,” they say.

Tying Diversity To Ownership

While broadcasters are pushing for varying levels of change, those on the outside looking in are embracing the status quo. The Multicultural Media, Telecom and Internet Council says the radio rules “should not undergo major changes” suggesting that relaxing the limits “would disadvantage minority broadcasters.” And while it says minority and women broadcast ownership is “embarrassingly low,” MMTC says new voices, not increased consolidation, is the fix.

Free Press also cites diversity issues for why it says the current limits must remain. It notes 7% of commercial FMs and 12% of commercial AMs are owned by minorities. Rather than allow bigger clusters, it urges the FCC to close the “loopholes” in its rules that allow owners to operate more stations than they’re allowed under operating agreements and shell companies.

For SAG-AFTRA, the issue is jobs. The union says broadcast ownership limits are needed to ensure a competitive environment that promotes a wide range of local news.

The FCC will continue to collect reply comments on the proceeding (MB Docket No. 18-349) until Oct. 1. It will then look to come up with some proposals that will clear an all-but-certain legal challenge.