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NABOB: Subcaps Must Stay

Move to repeal subcap rule undermines AM revitalization efforts, group says

A rule change being championed by some broadcasters would effectively undermine the efforts to revitalize AM radio, so says the National Association of Black Owned Broadcastersin a filing with the Federal Communications Commission.

This move would also have a disproportionately negative impact on minority-owned AM radio stations, the group said.

In a letter submitted to Chairman Ajit Pai on April 7, NABOB wrote to say it opposes a change in the FCC’s local radio ownership rule that limits the number of AM or FM radio stations a licensee can own. While the group supports relaxation of the radio/newspaper cross ownership rule, no circumstances exist to justify elimination of the subcaps rule.

This rule primarily affects competition between local radio stations in a market, and was put in place because the commission recognized technological and marketplace differences between that AM and FM stations that some say disadvantage AMs.

In the letter, the group recounted some of Pai’s own words on AM radio revitalization in an effort to illustrate that AM radio is not now — nor likely ever to be — on an equal competitive level with FM radio, the group said.

Thus, the argument to repeal the subcap rule is based on an unsupportable premise, NABOB said.

“AM and FM radio stations are not indistinguishable from a competitive standpoint,” the group said in their filing. The group referenced a letter from several broadcast owners that was submitted to the commission on March 2. The assessment that the time has come for the commission to eliminate the AM/FM subcaps, from the heads of Alpha Media, Connoisseur Media, East Arkansas Broadcasters, Galaxy Communications, Jackson Radio Works and Roberts Communications, fails to paint an accurate picture of the competitive relationship between AM and FM radio, NABOB said. The group says a review of Nielsen data for the top 50 radio markets bears out the lack of competitive equality between AM and FM stations.

NABOB members own approximately 180 commercial radio stations; of the 76 that are AM stations, none are Class A. “Thus, NABOB’s members will be impacted significantly if they are placed in the positon of competing against group owners operating up to eight FM stations in a market,” the group said.

“Counting AM and FM stations on equal terms for application of the commission’s radio ownership rules flies in the face of everything the commission has said and done to help AM radio,” NABOB said.