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Give Us Subcap Relief, Broadcasters Again Tell FCC

In some markets, one owner could own all the stations

FCC, FCC seal logoU.S. broadcasters are again urging the Federal Communications Commission to raise or eliminate the limits on how many radio stations a company can own in a particular market.

The National Association of Broadcasters filed comments this week in the FCC’s quadrennial review of ownership rules.

Under the NAB proposal, one broadcaster could, for instance, own all the AM stations in a city, no matter the size of that market. Also, in smaller markets, one company could own all of the FM stations.

NAB asked the FCC to allow one entity to own up to eight commercial FM stations in Nielsen Audio’s markets 1 through 75 — meaning cities as big as New York and as small as Baton Rouge — plus up to two more stations if the entity participates in the FCC’s incubator program

It also asked the commission to allow one company to own all AM stations in a market, and to allow one to own all FM stations in Nielsen markets 76 and smaller, as well as unrated markets. (Market 76 is currently El Paso.)

The current subcaps on stations are based on a sliding scale: In a radio market with 45 or more stations, an entity may own up to eight, no more than five of which may be in the same service (AM or FM). In a market with 30 to 44 radio stations, an entity may own up to seven, no more than four in the same service. In a market with between 15 and 29 stations, an entity may own up to six, no more than four in the same service. And in a market with 14 or fewer stations, an entity may own up to five radio stations, no more than three of which may be one service, as long as the entity does not own more than half of the radio stations in that market.

NAB also asked the FCC to do away with restrictions that ban combinations among top-four rated TV stations, regardless of audience or advertising shares and that prevent ownership of more than two stations in all markets, regardless of competitive positions.

[Related: “Further Relaxation on Ownership Seems Unlikely”]

The association had made these same recommendations in 2019. The latest comments are part of the FCC’s 2018 quadrennial review, which has been dragged out for various reasons including the ultimately unsuccessful legal challenge by Prometheus Radio and other critics to earlier rule changes under a Republican administration.

After the Supreme Court settled the Prometheus case, FCC Acting Chairwoman Jessica Rosenworcel opened up another round of comments to refresh the public record.

“The regulatory framework governing ownership of broadcast radio and television stations harms broadcasters’ ability to compete in the marketplace, impedes localism and fails to promote diversity in ownership,” the NAB wrote in a summary of its filing.

“Local radio and television stations operate under media ownership restrictions that date back decades to the analog era and fail to account for changes in the marketplace … These outdated media ownership rules, which no longer enable broadcasters to viably operate in a competitive market or effectively serve the public interest, are in more urgent need of reform than ever.”

The association says that with the decline of newspapers, broadcasters are among the few entities capable of producing “local news, weather, sports and emergency journalism,” efforts that demand high capital and operating costs, “which could be alleviated by leveraging economies of scale.”

It thinks current rules don’t take into consideration increased competition for advertising from big technology platforms or the impact of the pandemic on local journalism.

“In assessing competition, the FCC can no longer maintain the fiction that broadcast stations compete only against other broadcast stations … Given the record evidence … the FCC must conclude that its local ownership rules are no longer necessary in the public interest as the result of competition.”

It also said current rules restricting the size and scale of a station group discourage minority investment.