The problems of the AM radio band in the United States are not a reason for the FCC to leave current radio ownership caps in place. That’s the view of Connoisseur, Townsquare, Bonneville and several other radio groups.
They also told the commission that U.S. radio broadcasters are in an existential crisis.
The FCC has been taking reply comments in its latest quadrennial review of broadcast ownership rules.
Under current rules, in a market with 45 or more stations, one entity can own up to eight stations, including up to five in the same service (AM or FM). The limit is smaller as the number of stations in a market decreases.
As we’ve reported, the National Association of Broadcasters is leading a push to remove those restrictions, including local caps on radio ownership in a market, which would allow further industry consolidation.
Mid-West Family Broadcasting, Frandsen Family Stations, Midwest Communications and Legend Communications joined Connoisseur, Townsquare and Bonneville in a filing.
The groups disagreed with musicFirst, the Future of Music Coalition and the National Association of Black Owned Broadcasters, who have told the FCC that allowing more FM consolidation could harm AM broadcasters.
“The problems of AM will exist whether or not there is greater local ownership,” the groups wrote.
“Already, AM licenses are being surrendered every year because there are no viable business options for owners to pursue. … As rising waters raise all ships, all radio broadcasters will benefit from enhanced competitive opportunities created by the elimination of the Local Radio Ownership Rule, including by making broadcast radio more financially appealing to investors.
“Increased ownership caps may also allow for AM specialists to come into markets and buy many AMs to provide unique services.”
“Existential crisis”
The seven companies said the time is now for the FCC to remove the “archaic regulatory burdens that restrict radio’s ability to compete” in the marketplace.
The companies told the commission that U.S. radio broadcasters are “in an existential crisis as they can no longer compete effectively in the 21st century audio marketplace.” They believe that in the last 12 years, radio has lost about half of its audience and almost half of its advertising dollars without adjusting for inflation.
Among their arguments is that the FCC must consider competition across the entire audio marketplace; that broadcast radio competes directly with digital media for listeners and ad revenue; and that consolidation will not lead to less program diversity in local markets.
“The few comments opposing relaxation or elimination of the rules that focus on radio rely on unproven canards that modifying or repealing the radio rules will somehow lessen format choices for local listeners, deprive them of local news and information, harm AM radio and otherwise be contrary to the public interest,” they wrote.
“These claims simply do not withstand scrutiny.”
They told the FCC that the ownership rules are not responsible for less minority and local ownership. “Instead, competition from digital media is to blame.”
Greater diverse and local ownership cannot happen without access to capital, they argue, “and the barriers to full competition from broadcasters explains that lack of capital.”
“The commission must act now to allow broadcasters to build strong local brands that can compete against the Tech giants,” they wrote.
“The long-outdated Local Radio Ownership Rule prevents local radio broadcasters from competing effectively in today’s media marketplace by achieving the scale necessary to compete against digital audio platforms for local advertising revenue and audience share.”
They said competition for audience and advertising has only increased since the commission declined to change the rules in the previous quadrennial review.
“These trends will only continue as non-broadcast media outlets — many of which are controlled by the biggest companies in America — continue to explode. Absent relief from outdated and overly restrictive ownership limits, over-the-air radio stations will simply be unable to maintain their current levels of service to their local communities.”
