O’Rielly: Subcaps Must Go


Speaking at the Radio Ink Hispanic Radio Conference on Tuesday, FCC Commissioner Michael O’Rielly told attendees this new FCC, under the Chairmanship of Ajit Pai, would be paying a lot more attention to issues that affect the radio industry. And it sounds like this FCC will be dealing with those issues in a very positive way for you. One of the issues O’Rielly spoke about was the FCC’s outdated media ownership rules.

O’Rielly said limiting a company’s ability to buy or sell radio stations, or combine with television or newspapers, affects the valuation of stations, raises the cost for debt, prevents the exploration of market synergies, and keeps broadcasters from serving their communities. “I am not going to suggest that consolidation or aggressive purchasing in your market is appropriate. But, preventing you from even considering such deals is harmful to the long-term health of your stations.”

O’Rielly then said that, based on current competitive conditions, limiting the number of stations a company can own in a single market (subcaps) no longer makes sense. “While we need to look at raising the overall ownership caps within a market, there is little reason to maintain the subcaps.”

The Commissioner is not buying the argument that radio should be treated differently than other entertainment industries. “That ignores the reality that all media modes, including streaming, satellite, and social media, are fighting for the same audience and the same advertising dollars. Essentially, every content distributor is part of one big marketplace. That’s great for consumers, but it means we are imposing discriminatory and harmful limitations on your businesses’ ability to compete.”

What about the argument that subcap limits keep existing, stronger and larger AM station owners from selling and shifting to FM stations? O’Rielly is not going for that argument either. “Even if bigger AM owners exited, opting for FM stations, it would only increase the chances for new entrants, like Hispanic radio and others, to serve diverse and niche populations. Since minority ownership has been one of the biggest obstacles to modernizing our media ownership rules in the eyes of some, isn’t this potentially a good thing?”

O’Rielly could not specify when the Commission might take up the ownership or subcap issue but he certainly sounds like he is very open to raising the limits you can own.

We’ll have complete coverage of day to from the conference on Twitter Wednesday and in our Thursday morning headlines. Follow us on Twitter using the hashtag #HISRADIO17


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