(By John Garziglia) Finally, the FCC has published in the Federal Register the FCC’s Quadrennial Review Notice of Proposed Rulemaking. This Federal Register publication sets the comment and reply comment dates, with comments being due on April 29, 2019, and reply comments being due on May 29, 2019.
The Quadrennial Review is required by the Telecommunications Act of 1996 which directs the FCC to periodically determine if its broadcast ownership rules remain “necessary in the public interest as the result of competition.”
Last year, broadcasters in Radio Ink’s Deregulation Series stated a number of reasons why a relaxation of the radio ownership rules may be good. Among the stated reasons were that larger radio groups will be able to better compete with infinitely bigger social media platforms, radio will better attract capital, there will be no undercutting of rates when local competition is eliminated, rules unchanged since 1996 are not relevant today, formats would not be duplicated, and media brokers would be enriched. Many in our industry argue for no numerical radio ownership limits whatsoever.
The FCC’s Quadrennial Review NPRM discusses proposed changes to the radio ownership rules at paragraphs 9-39. Of note, the NPRM asks for comment on a June 15, 2018 proposal by the National Association of Broadcasters to eliminate radio ownership restrictions in all markets except for the top 75, allow for the ownership of up to eight FM radio stations in each of the top 75 radio markets (with two additional stations allowed if there is participation in the Commission’s incubator program), and allow the unlimited ownership of AM stations in any market.
Since 1996, the FCC has restricted radio ownership in the largest markets to a maximum of eight stations, of which no more than five can be in the same service (i.e. the AM/FM subcaps), with descending maximums for smaller markets. The result of this proceeding could be anything from a preservation of the status quo, to an elimination of just the AM/FM subcaps, to a complete elimination of the radio ownership rules.
The FCC is seeking comment on all aspects of its radio ownership rules. There appears to be a lack of consensus within our radio broadcasting community as to whether the relaxation or elimination of radio ownership rules would be beneficial. Those in favor of dramatic changes argue that there is a new competitive landscape with radio now competing with not only satellite radio but also internet streaming, Facebook and Google. Those opposed to relaxations believe that allowing for increased concentrations of radio ownership would harm AM radio and local broadcasting.
If you believe that your business circumstances and our radio industry would be enhanced by a significant relaxation or elimination of the radio ownership rules, you should file comments. Conversely, if you believe that radio ownership rule relaxations offer nothing or worse for you and our radio industry, you should likewise file comments.
Here are some other thoughts to consider. I noted in my July 15, 2019 Radio Ink article titled Radio Zoning: How A Limited National Ownership Cap Can Improve The Local Radio Landscape that our radio industry may benefit from certain ownership limitations on the larger radio groups to preserve local radio as we now know it. If there is a further relaxation of radio ownership rules, an existing local broadcaster may be put into the position of either being bought out by a large radio group, or watching as its competition is bought out and then competing against a national group that owns all of the other radio stations in the market.
If radio stations could be erected like fast-food establishments and grocery stores, with no numerical limits imposed other than a businessperson’s risk tolerance, it would be difficult to argue for FCC-imposed ownership limits on radio. But only FCC-licensed radio station owners can deliver free over-the-air content to the ubiquitous AM-FM radio receivers still found in just about every automobile, home, and office.
In 1996, radio was transformed at the local level by both the relaxation of local ownership rules and the removal of the national ownership cap. The radio ownership relaxations proposed by the NAB would once again transform radio at the local level just as did the 1996 elimination of the national cap. Rather than there being multiple competitors in any particular local market, there could be just one dominant national owner monopolizing that local radio market. And that dominant owner would be forever ensconced as there will never be additional full-market-coverage radio stations.
Many radio stations today remain community-based successful beacons of information. A radio station that still maintains a one-on-one connection to each listener through multiple daily touches is wholly different than a nationally formatted music-box radio station.
Giving an opportunity for some existing owners to become bigger and more profitable may not be a reason in itself for the FCC to eliminate current radio ownership restrictions. Radio is not simply a several-decades-old passing vogue, sandwiched in between the advent of TV and the Internet. The uniqueness of the radio industry through local ownership is unlike any other media.
Radio broadcasters might consider asking the FCC to acknowledge the massive competitive advantages that large national radio entities owning hundreds of radio stations have over smaller broadcasters, and the often adverse effects upon the public interest, by only allowing radio groups up to a certain national numerical size to throw off the ownership shackles as advocated by the NAB. Larger radio groups owning hundreds of radio stations would continue to be restricted to current local ownership limitations. Smaller radio groups owning no more than several dozen stations might take advantage of the ownership relaxations proposed by the NAB. Radio broadcasters would then have a choice: be small, local, and hyper-focused in several markets, owning most or all of the stations in those markets; or, be big but not own all of the radio stations in any market.
Many observations can be made about the future radio landscape and the potential impact of changed FCC’s ownership rules upon it. The important thing for our industry is for the viewpoints of all broadcasters to be heard.
The FCC is accepting initial comments in its latest Quadrennial Review through April 29, 2019. Whatever may be your view, whether it is a regression to 7-7-7 ownership limitations which likely no one supports, to unfettered radio station ownership without FCC restrictions, the filing of comments at the FCC will assist the Commission in its decision making process.
The FCC’s revised radio ownership rules, whatever they may be, will hopefully be adopted with the goal of protecting the amorphous concepts of localism and the public interest. The future of our radio industry is at stake.
John Garziglia is a communications attorney at Womble Bond Dickinson and can be reached at (202) 857-4455 or [email protected]