NAB Favors Modifying Radio Station Ownership Limits

Association says the current regulatory framework has not kept pace with the transformation of the marketplace
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WASHINGTON — As you may or may not know, the Federal Communications Commission will soon initiate the 2018 quadrennial review to determine if its broadcast ownership rules remain “necessary in the public interest as the result of competition” and to repeal or modify” any regulations that are not.

The National Association of Broadcasters believes “the existing radio ownership limits are not needed to promote competition in today’s audio marketplace and, in fact, impede terrestrial radio stations’ ability to compete and serve their local communities,” according to their document on the subject.

NAB asserts that the current regulatory framework has not kept pace with the transformation of the marketplace. “When the current local radio caps were adopted in 1996, streaming services like Pandora and Spotify did not exist. There was no satellite radio, no podcasts, no Facebook and no YouTube.” Over-the-air radio dominated the audio marketplace at the time, probably (at least partially) explaining the start of the consolidation period.

NAB goes on to say “...in the digital audio world of 2018, local radio stations, especially AM, face intense competition for listeners and advertisers. For free over-the-air radio to remain as a meaningful competitor to audio sources unencumbered by any comparable regulatory restrictions, radio broadcasters must be able to compete on a level playing field. This fact is particularly salient in smaller markets, with more limited available advertising revenue.”

NAB is suggesting the following changes to the regulations:

  • in the Nielsen Audio markets, allow a single entity to own or control up to eight commercial FM stations, with ownership;
  • 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; and 
  • in Nielsen markets outside of the top 75 and in unrated markets, on the number of FM or AM stations a single entity may own or control.

The second point seems a bit counterintuitive to me, at least in the way it is put. How will letting incumbent owners (in markets 75 and above) own up to 10 FMs promote new entries in to the business? There are only so many stations to go around, after all.

Regarding the Incubator program — last November, the FCC released an Order on Reconsideration of several of its broadcast multiple and cross-ownership rules, which included a Notice of Proposed Rulemaking looking toward increasing minority, female, and small business ownership by establishing an “incubator” program, which incentivizes established broadcasters to help those types of entities, according to commlawblog.com.

“The commission’s rules should account for the increased competition in the audio space. For radio to remain a free, over-the-air option able to provide quality entertainment and informational programming to all consumers, broadcasters must be able to create ownership structures that better ensure their financial viability today and into the future,” according to NAB.

For those of us in the industry — changes in the rules, as requested by NAB, will mean more work for some of us, less (or none) for others. It’s too early to plan for the results — but it is something to consider at the very least, especially in the current regulatory environment.

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