It will be interesting to see whose side the FCC takes when it makes a final decision on ownership caps during its Quadrennial Review process. The radio industry is divided. On one side, a group of owners being represented by the NAB wants to be able to own more stations. And on the other side, in opposition of more deregulation, we have iHeartMedia, Urban One, NABOB, and others. For iHeart, while they are vehemently opposed to the NAB’s plan for FM signals, on the AM side, not so much.
On the last day comments were allowed to be filed, iHeart’s 41-page document states iHeartMedia “opposes strongly the extraordinarily aggressive FM radio ownership proposals of the National Association of Broadcasters.” When it comes to AM stations, the company has a different stance.
iHeart — which has some of the most successful and powerful AM radio stations across the country — is requesting the Commission eliminate any limitations on AM stations in a market. And, iHeart states that, “the overriding imperative for the Commission in this proceeding should be to do no harm. The more focused change that iHeart suggests should enhance competition within the relevant market, avoid the harm to radio, especially potentially disastrous consequences for AM radio, that would foreseeably result from overly aggressive changes to the FM rules.”
iHeart made the following suggestions to the Commission:
(1) Do no harm, in particular do not precipitate further deterioration of the AM band or undermine the financial incentives for incubating stations embedded in the Incubator Order.
(2) Provide meaningful regulatory flexibility to remedy specific marketplace problems that might be eased by targeted changes in the ownership limits.
(3) Refrain from overly broad and aggressive rules changes that could harm local radio stations’ ability to meet the public-interest needs of the 90 percent of Americans who rely on it.
The document also says: “Applying these principles, iHeart respectfully proposes that the Commission change its local radio ownership limits in a highly strategic and targeted fashion, specifically by removing limits on common ownership of AM stations. Such targeted reform should improve market valuations of economically struggling AM stations, with benefits for jobs, programming, facilities, and community services.”
It was June of 2018 that the NAB shared this comment with Radio Ink: “I can assure you there was overwhelming support in the Board room for directing NAB staff to seek relief from the ownership rules. It was not a close call.” What matters now is how the five FCC Commissioners perceive radio’s togetherness on the issue and whether or not that will matter when they decide what to do. This Commission, under Ajit Pai and with a Republican majority, has appeared to be leaning toward some sort of change. Those that want ownership caps loosened have argued that owning more stations will allow them to better compete with Facebook, Google, and other digital companies that are now taking ad money out of the local markets. Some in opposition state that owning eight stations now leads to cheaper, sometimes bonus radio ads, and giving those companies even more stations is not the answer.
Here’s what the NAB is proposing:
(1) In the top 75 Nielsen Audio markets, allow a single entity to own or control up to eight commercial FM stations, with no limit on AM ownership.
(2) To promote new entry into broadcasting, an owner in these top 75 markets should be permitted to own up to two additional FM stations (for a total of 10 FMs) by participating in the FCC’s incubator program.
(3) In Nielsen markets outside of the top 75 and in unrated markets, there should be no restrictions on the number of FM or AM stations a single entity may own or control.
iHeart is urging the Commission to reject that plan, stating that change would exacerbate the competitive disparity between AM and FM stations. “Doing so will avert the very real threat of a mass divestiture of AM stations in favor of FM station purchases and the consequent devaluation of AM assets and attendant listener flight from the AM band. Finally, iHeart is concerned with the impact of the NAB proposal on the successful implementation of the Commission’s 2018 Incubator Order, which holds important potential to achieve meaningful progress toward increased ownership diversity in broadcast radio. The financial incentives essential to that program’s success would be significantly undermined by NAB’s proposal as it relates to FM ownership limits.”
Read the 41-page iHeart filing HERE.
