The Federal Communications Commission finally completed its 2018 Quadrennial Review under the 90-day deadline laid out by the DC Circuit of the US Court of Appeals, but the regulatory assessment ended disappointingly, if not predictably, for many broadcasters.
All eyes in radio were looking for any changes to the Local Radio Ownership Rule, which could relax the cap of eight commercial radio stations in markets with at least 45 stations, with a maximum of five in either AM or FM service. In smaller markets, the number of allowable stations decreases.
Despite acknowledging the evolving media landscape and the challenges faced by broadcast radio by way of unregulated digital competitors, the FCC found no convincing evidence that further consolidation would address these challenges in a meaningful way. There was concern that additional consolidation might decrease competition, reduce viewpoint diversity and localism, and not align with the FCC’s mandate to distribute licenses widely.
The FCC also chose to make permanent the interim contour-overlap methodology used to determine ownership limits in areas outside Nielsen Audio Metro markets. This method defines a geographic market based on overlapping signal contours of radio stations. Regarding embedded markets, the FCC decided not to alter its current presumption, which allows some flexibility in ownership limits under specific conditions.
The FCC also considered the impact of the Local Radio Ownership Rule on minority and female ownership of broadcast stations. They concluded that relaxing the rule would not necessarily enhance minority or female ownership, and might even pose additional challenges to these groups entering or remaining in the market.
FCC Chairwoman Jessica Rosenworcel celebrated the final decision, commenting, “For decades, the Federal Communications Commission has had rules that limit the number of broadcast stations a single entity can own. This approach is a product of the Communications Act and the values in the law that have always informed our approach to media policy—support for localism, competition, and diversity of ownership. These values support jobs and journalism. They are important. Even as times change, these values remain. So does the law.”
“While the ways we consume news and content in the digital age have changed, this approach is consistent with our longstanding values. It helps ensure that entities—both big and small—play by the same rules when they seek to build a station and audience in local markets.”
Commissioner Brendan Carr gave a dissenting opinion, saying, “I’ve seen the impacts of our backwards-looking policies firsthand. During a visit to Powell, Wyoming, a town of about 6,000 people that sits in the northwest corner of the Cowboy State, I stopped by a local radio station, only to find its doors locked. After we were finally able to rouse someone to let us inside, I got a good look at the operations—effectively a Dell laptop playing music pumped in from some big city somewhere else.”
“A couple of miles away in Cody, there was a local broadcast company that was investing in their community and the types of local news and entertainment programming that are attuned to the needs of their listeners. This company wanted to invest in the Powell station and originate live and local programming for this underserved community. But they couldn’t. Not because they lacked the capital or a willing seller, but because the FCC wouldn’t let them. Our ownership rules—which are supposed to promote competition, a diversity of viewpoints, and localism—were keeping that laptop powered up while preventing actual investment in local newsgathering and the local jobs that come with it.”
Broadcast Attorney Frank Montero of Fletcher, Heald & Hildreth told Radio Ink, “I think faced with the court’s ticking deadline, the FCC seems to have taken the easy way out and done nothing. In radio especially, where there was overwhelming support for the relaxation of market ‘subcaps’ which limit the number of same-market FMs versus AMs that could be attributed to any single broadcaster, I think this was a missed opportunity to give the radio industry a competitive boost and this runs counter to efforts at revitalizing radio services. It’s unfortunate because other digital and on-line media services that the FCC lacks jurisdiction over are being allowed to monopolize the market at the expense of the very industries that the FCC is charged with encouraging and help flourish in the public interest.”
The FCC, NAB, and all interested parties can now turn to the 2022 Quadrennial Review, which commenced on December 22, 2022.
