The National Association of Broadcasters radio board last week voted on a proposal to revise the FCC rules limiting the number of stations that one company can own in a radio market. This proposal was forwarded to the FCC for consideration in the next Quadrennial Review of the FCC’s ownership rules, scheduled to commence at some point later this year, in a letter delivered to the FCC’s Chief of the Media Division. The NAB suggests that one party should be able to own up to 8 FM stations in any of the Top 75 Nielsen radio markets. It proposes that there should be no FCC ownership limits in markets smaller than the Top 75, and that AMs do not need to be counted against the ownership limits. Owners who incubate the ownership of stations by new entrants into broadcasting would be allowed to own up to two additional FM stations in a market. Why would the NAB take this position?
The letter sets forth many of the same issues that we cited in our article on radio ownership here. Competition is significantly different than it was in 1996, when the current rules setting limits at 8 stations in a market (only 5 of which can be AM or FM) in the largest markets, and in the smallest markets, only two stations (one AM and one FM). As we wrote in our April article, competition for listening like Pandora, Spotify or even YouTube did not exist in 1996 (not arriving on the scene for another decade). Changes in competition for local advertising has been even more dramatic, with some sources showing that over 50% of local advertising revenue (the bread and butter of local radio) is now going to digital competitors – with Facebook, Google, and even the digital music services selling advertising to local advertisers throughout the country, even in the smaller markets. Continue Reading