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NAB: LPFMs May Hurt Fragile Full-Power Niche Stations

Licensing more urban LPFMs may affect AMs, association cautions

The NAB says the FCC should look at not only how low-power FMs have affected existing full-power commercial FMs economically, but also at their potential impact in the future.

It filed comments with the agency for a congressionally-mandated report associated with the practical details of implementing the Local Radio Community Act.

NAB said Congress directed the commission to examine the impact that LPFM “will have” on full-service stations. “Congress’ deliberate choice of those words indicates that it wanted the FCC to focus on the future impact of LPFM after the changes required by the Act are implemented,” the trade association stated.

NAB presumes Congress required the report so lawmakers could consider further changes to the LPFM rules if operation of the low-power stations would hurt full-power FM service.

The FCC should focus on the impact of niche-format stations, because the agency’s assumptions that LPFMs would serve audiences with programming not available from mainstream stations may be wrong, the association said.

“As LPFM stations are licensed in larger urban areas, they may choose formats that compete with existing full-service stations already serving the same niche audiences,” stated NAB.

It included a format study by BIA/Kelsey’s Dr. Mark Fratrik finding that stations with foreign-language, ethnic, bluegrass and other non-mainstream formats are located mainly in urban areas where there have been few LPFM stations up to now.

Fratrik found these stations have much smaller audiences, and therefore revenue, than mainstream-format stations in large markets.

“These stations, which may serve similar kinds of niche audiences as LPFM stations will, are economically fragile,” according to NAB and Fratrik.

“If they lose significant parts of their current audience, their survival — or their survival with their current formats — may be in doubt.”

Many of these urban niche audiences are served by AM stations; Fratrik and NAB suggest the FCC also consider the impact to the public interest if licensing new LPFMs results in a loss of service from AMs. NAB suggests the FCC look at changes in the size of both audience and ad revenues as it considers the impact that increasing the number of LPFMS may have had, or could have, on full-service FMs.

An issue on which the FCC had asked for comment is how to measure the impact of LPFMs in markets un-rated by Arbitron. NAB suggested the commission use the population within a station’s protected contour as a proxy for audience size and revenues. It suggests the FCC seek revenue and audience information from LPFMs themselves.

NAB urges the agency to look at cases in which LPFMs’ underwriting efforts siphon ad revenues, and audience, from full-service stations. Some LPFMs have sold commercial ad time, and the FCC should look at that, states NAB, which emphasizes that, “This record, and the fact that LPFM licensees often have no prior experience with the commission’s rules, means that the commission cannot simply assume that new LPFM stations will not also try to sell advertising.” NAB states a discussion of appropriate LPFM enforcement should be part of its report to Congress.

Comments to the commission to Docket 11-83 were due last week.

— Leslie Stimson