While the NAB and several broadcast groups challenged the FCC’s 2018 Quadrennial Review in the Eighth Circuit Court with oral arguments against current ownership caps, an unexpected topic made an appearance: the fight to save AM radio.
In oral arguments on March 19, representatives pushed back against the agency’s decision to maintain current ownership limits, asserting that they remain necessary to promote competition, localism, and viewpoint diversity.
Broadcasters contend that the FCC has failed to properly account for the rise of digital platforms, streaming services, and social media, which have fundamentally altered the competitive landscape. Radio broadcasters, in particular, have argued that the FCC’s restrictions are no longer justifiable in a marketplace where local stations are competing against digital giants that did not exist when the Telecommunications Act was passed.
Broadcast attorney David Oxenford, of Wilkinson Barker Knauer LLP, representing the petitioning radio groups, stated, “The FCC’s claims for deference, that radio is a separate market, really cannot be credited when you look at the empirical evidence that we provided showing that radio competes every day for both audience and advertisers.”
Oxenford said the FCC has ignored multiple industry studies demonstrating that advertising and audience share are shifting rapidly from traditional radio to digital. He emphasized that the economic pressures on local broadcasters continue to intensify, citing research showing that a third of radio listening has disappeared since 2014. Additionally, the share of local advertising revenue going to digital platforms has skyrocketed, with Oxenford stating, “Since 2013, digital giants have taken advertising originally in 2013 at 25% of the local markets. Now it’s about 70% of the local market. Advertising is going out of the market to the digital giants. 50% of advertising dollars from every market goes to Google, Facebook, and Amazon. No radio station in any market has a 1% market share.”
The petitioners argue that these market realities should justify an overhaul of radio ownership limits, which currently prevent companies from owning more than a set number of AM and FM stations in each local market. Without changes to these rules, they warn that local stations will continue to lose resources, making it harder to invest in content, news, and talent.
As Gibson, Dunn & Crutcher Partner Andrew Kilberg stated for the petitioners, local stations are facing growing competition from digital content creators, including independent YouTubers and social media personalities. “Now the person who’s going to beat you there may be a civilian person with TikTok. Twenty of them,” Benton observed.
In response, FCC attorney James Carr defended the Commission’s decision, arguing that local radio and television broadcasters serve a distinct public interest function that is not fully replicated by digital platforms. “Promoting competition, we look at that goal as interrelated with the other two goals, localism and viewpoint diversity,” Carr stated. The FCC’s position is that maintaining multiple, independently owned broadcast voices within a market is essential to preserving competition and diversity in local content.
Carr also countered claims that digital competition should allow for the deregulation of radio, arguing that consolidation could ultimately reduce the number of local broadcasters producing original content. “The best way in the Commission’s judgment to promote localism is to ensure that you have a multiplicity of voices, that you don’t have further consolidation in the broadcast markets because the broadcasters are the only ones who are providing this sort of local program,” he told the court.
During the hearing, the AM Radio for Every Vehicle Act was brought up by multiple judges to the extent that one judge asked, “Is AM radio dying?” Carr said that, “There are small radio stations, particularly small AM stations, that are struggling,” but argued that relaxing ownership rules would not necessarily save them.
NAB SVP of Communications Alex Siciliano commented on the day’s proceedings, saying, “While the case plays out in court, one fact remains unchanged: these decades-old regulations are putting the future of your local radio and TV stations in jeopardy. Without reform, local stations will struggle to survive when they cannot compete with tech giants for advertising and sports rights.”
“That’s why it is critical that the FCC expeditiously modernize its broadcast-only ownership restrictions. Policymakers must recognize that these rules don’t serve the public interest, they weaken the stations that serve local communities across America. It’s time for real reform that gives local stations the flexibility they need to thrive and continue delivering the essential content their communities depend on every day.”
No matter what the court decides, ownership cap changes could be on the way with the 2022 Quadrennial Review, which remains overdue. Newly appointed FCC Chairman Brendan Carr previously dissented from the 2018 Review’s decision, 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.”
Chairman Carr has also begun a “Delete, Delete, Delete” initiative aimed at eliminating outdated, unnecessary, and burdensome regulations within the FCC, which could extend to ownership caps.
This case really highlights how much the media landscape has shifted. Local stations need more flexibility to survive in a digital-first world—hopefully, this leads to meaningful reform.
Cooper’s comments are spot on. As an owner of an AM/FM from ‘69-99, I saw the handwriting and got out but sadly my community lost. Our stations were the “Heart Beat” of the community, but no more.
Put regs back to Pre-96 and let communities have bonified AM and FM’s with power and coverage .
Ive seen the destruction of radio first-hand starting with the deregulation of radio ownership caps with the Telecomm Act of 1996.
THAT destroyed the vibrant diversity of the radio industry, jobs and those independent competitors, mom and pop groups that provided localism in every market. With slash and cut barons like Lowry Mays and his Clear Channel group of investors, they laid the course that would bring today’s disastrous outcomes. Stations shutting down without a selloff to an indie owner out of fear of it competing against them (It should be required that they sell). Antenna towers sold off in perpetuity forcing any future owner to take that bad deal in order to power his station. (This practice should be reversed by eminent domaine law back to licensees as well as ownership caps back to pre-1996). The recent 5 year trend of mass layoffs forcing an ending of countless radio careers. And the same 5 talk show hosts from coast to coast snuffing out the local guy who could be servicing his community in thaf timeslot. The same cookie cutter morning show on hundreds of what would be localized shows. No presence in the building. Staffs are skeleton crews in small markets that used to employee dozens of people. All lost for the sake of corporate and the individual greed of a few. And you want MORE OF THAT? You’re a clown.
This hearing really highlights how outdated ownership rules are hurting local stations. With digital giants dominating ad revenue, it’s time the FCC gives broadcasters a fair chance to compete.