The National Association of Broadcasters said FCC Chairman Brendan Carr and his fellow commissioners should strike down local radio and television ownership restrictions in order to create a competitive balance for all within today’s “radically transformed” media landscape.
NAB is asking the FCC to do away with all radio ownership caps and subcaps and it made its case in the 87-page reply comment filing, reinforcing the argument the association laid out in December in its original comments to the commission.
“Despite dramatic changes in how Americans consume media, local broadcasters continue to be shackled by rules first crafted nearly a century ago – rules that do not apply to our competitors,” NAB said in its filing on Jan. 16.
At present, in each of the largest radio markets, a licensee can own up to eight commercial radio stations, but the subcaps limit a licensee from owning more than five in each band in specific markets. The cap shrinks as market size decreases.
Those caps are “artificially restricting the scale of local broadcasters, and thus their ability to attract investment, audiences and the advertising revenues needed to serve their communities,” according to NAB.
Central to its argument, NAB believes that competition from online content providers and digital ad platforms – not from within the radio industry – has caused the “precipitous declines” in audience share and advertising revenues suffered over the past two decades.
A 30-year cycle
The FCC is in the middle of its 2022 Quadrennial Review process and has been collecting comments on the future of radio ownership limits — Jan. 16 was the deadline to file reply comments.
The commission’s 2-1 Republican majority is viewed by most observers as being generally supportive of broadcast ownership reform. What’s not clear is how far it might go in relaxing the current rules.
NAB, the broadcast advocacy group, argued in its comments that critics of reform rely on “legally untenable arguments and very selectively chosen data to ignore today’s competitive media landscape.”
Specifically, the group said that there are less than a handful of parties on the record calling for the retention of the now 30-year-old radio caps, and they are simply repeating old arguments that have already been refuted by broadcasters.
“Time has long since run out on these parties’ repetitive, unmeritorious and hypocritical arguments,” the NAB told the FCC.
In its filing, NAB argued that retention of asymmetric ownership restrictions has prevented radio from increasing taking advantage of economic, investment and competitive opportunities on a local scale to gain audience and advertising revenues.
By doing so, NAB believes, media companies can better maintain and even enhance their news, emergency information and entertainment offerings in local communities across the country at no cost to the public.
Small broadcasters on board
In extensive comments, the NAB refutes several of the dissenters’ arguments surrounding the outcomes of several high-profile court cases, including the Supreme Court’s decision in FCC v. Prometheus.
(Read NAB’s Jan. 16 reply comments to the FCC in their entirety here.)
The association urged the commission to reject arguments from opponents of reform who claim that smaller broadcasters en masse oppose modernization of the local radio caps and that only radio conglomerates support changes.
“In fact, a number of small and mid-sized broadcasters have called in this proceeding for repeal or at least relaxation of the local radio caps, including a broadcaster owning only two stations and others owning radio stations in only one market,” it said.
[Related: “Radio Groups to FCC: Ownership Caps Threaten Survival”]
As Radio World reported, the National Association of Black Owned Broadcasters (NABOB) is on the record opposing any changes to the local radio ownership rule, but NAB countered arguments made by the group that further consolidation would cause the further decline of Black station ownership.
NAB said the declining revenues of Black-owned stations cited by NABOB were consistent with the economic struggles of smaller radio broadcasters and those in mid-sized and small markets.
“Rather than somehow supporting the retention of outmoded ownership caps, as NABOB suggested, radio stations’ limited and declining ad revenues call for repeal of those economically harmful local caps,” NAB wrote in the filing.
NAB also refuted arguments made by the musicFIRST Coalition and the Future of Music Coalition, claiming the groups have made it clear they oppose reform of the radio ownership caps due to their frustrations about failing to convince Congress to alter copyright law and impose new performance rights fees on radio stations.
That’s something NAB argued is “totally irrelevant” to the current proceeding.
In addition, NAB said the coalitions represent the music industry, which is dominated by three consolidated international record labels.
“The three major companies jointly generated about $2.9 million per hour in 2023. In remarkable contrast, in 2023 and 2024 the vast majority of radio stations garnered less – and often much less – than $2.9 million per year in advertising revenues.”
Read more on the arguments from musicFIRST Coalition and the Future of Music Coalition here.
Pulling no punches
NAB at times was quite expressive in its use of language in its filing to the FCC.
The association wrote of a critic “while pretending in this proceeding to cry yet another river over the struggles of small broadcasters to compete; and then: “NAB trusts that all the ink certain commenters metaphorically spilled in failing to undermine the Eighth Circuit’s conclusion….”
Accordingly, the group urges the government agency to move fast and eliminate its unnecessary and harmful local broadcast ownership rules.
“NAB urges the commission to conclude this proceeding quickly and finally rid the media marketplace of these artificial and competition-distorting restrictions imposed on broadcasters alone,” the association concluded.
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