In a 90-page rebuttal to comments submitted to the FCC opposing relaxing the current ownership rules, the NAB defines them as “backward,” by actually starting their comments with the dictionary definition. “Backward” (adverb) – in the reverse of the usual or right way.”
The NAB argues that comments suggesting relaxing the ownership rules by focusing on new audio competitors fighting for ad dollars and audience, would be failing to act in the public interest, are completely wrong. “To the contrary, that should be the precise focus of the FCC’s review of its radio caps, and commenters such as these have it exactly backward. If broadcast stations cannot successfully compete against other audio and video delivery platforms for audiences and, thus, advertising dollars, they will not earn revenues needed to cover their substantial fixed costs and will be unable to serve listeners and viewers effectively, let alone improve their programming and technical facilities.”
The NAB has been arguing that radio stations are now battling with the unregulated digital world of Facebook, Google, Pandora, and others, for both ad dollars and audience. Those that oppose – which include iHeartMedia, Radio One, Salem, and The National Association of Black Owned Broadcasters – will squash diversity and put the final dagger in AM Radio.
iHeart urged The Commission to reject the NAB plan, because they believe it 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.”
The NAB disputes that argument as well. “While several commenters contend that loosening or removing the FM subcaps will devalue AM stations, no aspects of NAB’s proposal would require, or even directly encourage, radio broadcasters to sell their AM stations, particularly given that AM ownership would no longer ‘count’ against any overall market cap. It also would be inappropriate for the FCC to maintain competitively unnecessary ownership subcaps to essentially coerce broadcasters into acquiring or retaining one type of radio outlet over another. The appropriate focus here is the ability of the radio station industry overall to compete successfully and serve consumers effectively.”
The NAB goes on to say that hyperbolic claims that broadcast deregulation will eliminate all diversity and all local news, or generalized complaints about media consolidation, provide no basis for retaining analog-era ownership rules. “The FCC should discount the unsupported opinion and rhetoric submitted by parties wedded to a backward-looking approach to regulating radio and TV stations, and adopt rules reflecting competitive conditions in the 21st century.”
In terms of where this is headed, the speculation is that the FCC will not do anything until the 3rd Circuit issues its decision in the 2014 Quadrennial Review. We understand the status of that case is that it was delayed due to the government shut down and wasn’t completed until April. The court has not yet scheduled oral arguments so that decision looks to be many months away.
Read the NAB comments HERE.