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NAB Attacks FCC Ownership Rules

NAB National Association Of Broadcasters FCC Quadrennial Ownership Review DeregulationThe NAB is seeking further deregulation of media.

In their comments to the FCC in regards to the 2010 and 2014 Quadrennial Regulatory Review of Broadcast Ownership Rules, the NAB states that the commission needs to “recognize and come to grips” with changes that have happened to media since the last review in 2006.

While focusing on television related issues such as JSAs and Shared Services Agreements and seeking the removal of the newspaper crossownership rules, there are quite a few statements regarding the radio industry.

Discussing the need to have the current limits on the amount of stations a company can own in one market, the NAB writes,

If the Commission now intends to justify retention of the existing local radio rules based on localism concerns, it must acknowledge and justify this reversal in course. The empirical evidence from previous ownership reviews, however, indicates that the local radio restrictions are more likely to inhibit localism than foster it. In short, localism concerns do not justify maintenance of the current radio ownership limits. Similarly, the Notice states that “the radio ownership limits promote viewpoint diversity.” This assertion, however, is inconsistent with multiple statements made elsewhere in the Notice that the Commission has recognized “since at least 1970 that radio does not play a dominant role in promoting viewpoint diversity” and that “consumers’ reliance on radio news has declined steadily over the past two decades.”

The Commission cannot rationally claim that radio contributes to viewpoint diversity for purposes of one of its ownership rules but at the same time assert that radio lacks importance for viewpoint diversity in the context of two other ownership rules. Such inconsistency is arbitrary and capricious. The Notice contains no empirical evidence supporting the claim that the current numerical caps are needed to preserve viewpoint diversity, a claim that appears inherently unlikely in the media marketplace of 2014.

At least with regard to the thousands of music-oriented radio stations, NAB also continues to believe that diversity of programming content (rather than diversity of viewpoint) is the most important type of diversity to radio station listeners. This type of diversity is furthered by common ownership. Numerous studies, including some commissioned by the FCC, have found that common ownership of radio stations results in the offering of more diverse programming to audiences. In addition to these, NAB has previously identified eight additional studies, all finding that common ownership of radio stations results in the offering of more diverse and more targeted programming to audiences.

Because the Commission has not shown that the existing radio ownership caps promote localism or diversity or are necessary in light of competition in the audio marketplace of 2014, they cannot be retained without modification.

Continuing on regarding the the need to remove the cap on amount of stations on one band a company can own,

If, despite the changes in the marketplace since 1996, the Commission remains unwilling to reform the numerical radio limits, it should nonetheless consider eliminating or modifying the AM/FM subcaps. Elimination or reform of the subcaps would provide increased flexibility to stations without increasing the number of stations that a single entity could own in any local market.

The Commission has previously recognized “the daunting technical and competitive challenges that AM broadcasters face” and their significant declines in listenership. The Commission therefore should further consider repealing or modifying the subcaps to allow owners of AM stations to form more competitively viable ownership structures. Reforming the AM subcap would further the goals of the pending proceeding to revitalize AM broadcasting.
Additionally, the Notice requests comment on whether to adopt a specific waiver standard for radio. NAB urges the Commission to adopt a waiver standard for radio consistent with Section 202(b (2) of the 1996 Act. That section expressly authorizes the Commission to permit common ownership of radio stations beyond the numerical limits specified in Section 202(b)(1) if such ownership would “result in an increase in the number of radio broadcast stations in operation.”

Consistent with statutory language and Congressional intent, the Commission should make clear it will grant waivers in such circumstances to increase service to the public (e.g., where waivers would allow dark stations to return to the air, prevent a bankrupt or financially struggling station from going off the air, or facilitate the construction of an unbuilt construction permit for a radio station). There is no reason for the Commission to decline to grant waivers in these or similar circumstances.

INSTANT INSIGHT: It’s amazing to see an organization out to support broadcasters say one thing while the majority of the members do the exact opposite.

While many radio executives state that Pandora and other streaming services are NOT radio, the NAB makes its case for broader ownership limits on the streaming competition. The organization does state correctly that allowing companies to own additional stations will lead to further programming diversity, but only because a company will remove any local direct format competition from stations it acquires.

Can anybody solve this riddle? How will allowing a company to own MORE stations in a market increase the diversity of ownership voices by allowing new owners such as females and minorities to acquire stations?

Profile photo of Lance Venta
Lance Venta is the Owner and Publisher of RadioInsight.com and a consultant for RadioBB Networks specializing in integration of radio and the internet. Lance has two decades of experience tracking the audio industry and its use of digital platforms.

4 Comments

  1. Profile photo of Steve Varholy


    It’s an amazing piece of doubletalk and demonstrates the inherent difference in interests of their members: the large radio conglomerates such as Cumulus and Clear Channel and the “mom and pops” and standalones who stand to either get run over or cashed out.

    If the FCC does lift the market caps, we’ll see another rush of consolidation, virtual monopolies in the local advertising markets, more syndication and less local service.

    In the end, the non-comm sector will be the only winners, if only by default.

  2. Profile photo of airplane777


    Instead of trying to dominate a crowded radio band with translators and petitions to increase ownership limits; the broadcast conglomerates should break away from this regulated medium and invest in technologies that would deliver audio internet streams to cars and homes without tying up the family PC. This way an unlimited amount of content could be offered and the need for the FCC to discriminate against these broadcast companies would no longer apply. However broadcasters would need to offer a standard stream that would be compatible on most computer based devices that would play audio without secretly installing spy software, tracking cookies or any other undesirable nonsense that would discourage usage.

  3. Profile photo of Eva


    The FCC really needs to re-regulate broadcasting again.

  4. Profile photo of airplane777


    Traditional broadcasters need to transition to Streaming.

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