In the last few weeks, a Democratic Senator and a Republican FCC Commissioner have both expressed support for the future of AM radio.  This is not a new topic, being the subject of speculation for at least the last 20 years as FM listening caught up to and surpassed the older service’s audience.  But, when considering worldwide trends, a real question arises as to whether this inquiry is too narrow, and whether the FCC should not be taking more steps to insure the continuation of a free, local broadcast service.

In the last decade, the FCC has considered and, in many cases adopted, various proposals to revitalize the AM service – including providing FM translators for AM stations (see our articles here and here) and permitting all-digital AM operations (see our article here).  Other proposals, including one for across-the-board power increases for AM stations (see our article here) and another to lessen the interference protection enjoyed by high powered “clear channel” AMs, which would allow lower power local AM stations to increase nighttime power (see our article here), have not been adopted.  What new issues are being raised by these recent expressions of support from DC regulators?

Senator Markey addressed one of the most pressing issues for AM stations (and even to some extent for FMs) – whether new cars will have receivers capable of picking up their signals.  This is an issue perhaps most pressing for all-electric cars, where some manufacturers have removed AM radios because of the difficulty of shielding these radios from electronic noise that disrupt the AM signal generated by the electric drive systems.  While the shielding reportedly can be done (see, for instance, the NY Times article here), some car makers apparently don’t feel that it is worth the effort given the diminishing audience for the AM service.  Senator Markey decided to address car makers directly, writing a letter to 20 manufacturers asking for a report by December 22 about their future plans for including both AM and FM radios in their cars.  Markey’s letter stresses the importance of AM radio in addressing local issues and conveying emergency information, especially given its ability to reach great distances and because it is free to the user. We’ll watch to see if this letter causes any reactions from the manufacturers, and whether Congress will take this up as an issue.  Markey’s letter is available here, and a press release about the letter is here.

Commissioner Simington also expressed his support for AM, though his discussion seems to be looking for the FCC to address the issues.  In a speech at the National Association of Farm Broadcasters, Commissioner Simington proposed that the FCC renew its efforts to help AM radio. Among his proposals were a revamping of FCC regulatory fees to ease the burden on broadcasters, encouragement of auto manufacturers to retain or include AM in new cars, and an FCC study of AM receiver standards.  He also suggested that the FCC once again look at the potential for activating FM chips in mobile devices.  Watch to see if any of these ideas proceed at the FCC.

Other industry developments suggest that a review of AM standards, while important, does not go far enough to address the challenges faced by the broadcast radio industry.  Both Senator Markey and Commissioner Simington note issues that affect both AM and FM broadcasters.  But, both here in the US and overseas, there is greater competition than ever before from online services that provide many of the same entertainment programming elements as do radio, but often without the local touch that broadcasters can provide.  We’ve written about how these concerns have manifested themselves in requests for relief from current FCC ownership restrictions by broadcasters who find such restrictions outdated, as they limit local radio’s ability to offer a multiplicity of services to compete with those that can be offered by any of the online platforms.  We also noted that these same concerns were expressed in legislation offered by Senator Rand Paul which would require any antitrust analysis of a broadcast acquisition to recognize that broadcasters compete against online services both for audience and revenue, and that all are in the same “market.”

The challenge to broadcasters is perhaps best illustrated by the recent statements in a speech by the BBC’s director general who suggested that, within 10 years, the BBC would stop offering traditional radio and TV services, but instead would deliver all of its content online and through an expanded app (see articles about this announcement in the Guardian and on the Jacobs Media blog).  The United Kingdom may geographically be different than the United States, not having the vast rural areas that don’t get reliable wireless services.  Listeners in the US are also still more reliant on cars, where the bulk of radio listening still takes place.  Moreover, the US broadcast system has developed as one reliant on local commercial services both in radio and TV.  The BBC, while having regional services, is best known for its national programming, and local commercial radio in the UK was an add on to the initial state-run broadcasting service, the opposite of the development of broadcasting here.  So, there are many reasons that local broadcasting in the US may not be going in the direction of the BBC anytime soon.  Nonetheless, the recognition that online programming is a substitute for that delivered over the air is one that needs to be heard in the US as well in fashioning FCC policy for the future.

As we have written before, this is no longer your parents’ broadcast industry.  Regulations need to catch up and reflect the current marketplace realities.  To preserve local service, changes need to be made in how those services are regulated.  There needs to be more parity in regulation between the lightly regulated online services whose market share is growing, and the heavily regulated broadcast services whose audience has been more level.  There just may not need to be the multiplicity of broadcast operators in each market that was once required (see our article here about the lack of applicants for FM channels in the last broadcast auction), when there are more and more ways to communicate to the public in those markets that do not require a broadcast license.  And, in imposing artificial constraints on local broadcasters in each market, regulators may be weakening the ability of these broadcasters to offer the local service that we (and the FCC and other regulators) have long sought to foster.  These are challenges calling for more review, investigation, and action by Washington regulators to recognize today’s realities before local service is fundamentally undermined.