Multiple Ownership Rules

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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 NAB Asks For Changes in FCC Local Radio Ownership Rules – What’s Next?

The FCC yesterday issued a Declaratory Ruling approving the acquisition by a company owned by two Mexican citizens of 100% of the ownership interest of a company that owns two radio stations in California and Arizona. Currently, the company owned by the Mexican citizens had only a 25% interest in the parent company of the…

With the NAB Convention upon us, and much of the talk being centered on television issues including the repacking of the TV band after the incentive auction, the conversion to the next-generation of TV transmission as allowed by the new ATSC 3.0 transmission standard, and the effects of the FCC’s changes in the local television ownership rules and the reinstatement of the UHF discount in connection with the national ownership cap, it almost seems like radio is an afterthought. The FCC is considering some matters of interest to radio, including how to revitalize the AM band, and it has taken steps to revitalize individual AM stations through the use of FM translators. And the FCC is apparently considering changes in FM through the creation of a new class of C4 stations (see our post here). Yet, in recent ownership orders from the FCC, while TV ownership rules have been dramatically relaxed in the face of new video competition so that local TV owners can more robustly address their challengers, there were no corresponding changes in the radio rules. In the last ownership proceeding (which we summarized here), other than making changes to the embedded market rules (potentially affecting only radio stations in the suburbs of New York and Washington), and allowing ownership joint ownership of radio with TV and newspapers through the abolition of the cross-ownership rules that had limited or prohibited those combinations, radio ownership rules themselves have not been subject to any real changes in ownership limits since those limits were set in the wake of the 1996 Telecommunications Act. The FCC did make some changes early in this century when it adopted Arbitron (now Nielsen Audio) markets as the way in which competition in rated markets is defined, but the numbers of stations that one party can own has not changed since those numbers were established in the 1996 Act – even though Congress gave the FCC the authority to review and revise the rules to insure that they remained in the public interest.

While there have been no changes in the ownership rules for radio, think about the changes that have taken place in the competitive environment since 1996. At that point, streaming was something only a few technologically-forward people even knew existed. Pandora did not launch its streaming service for another decade, and Spotify was even further behind – not launching in the US until 2011. Even those few people who knew that audio streaming existed in 1996 would never have thought that they could listen to a streaming service in their cars. Apple was not offering a streaming music service – in fact it had not even introduced the iPod (introduced in 2001) or the iTunes store (2003) – both now about to become technological relics themselves because of technological changes. Given that there was no iPod, there were obviously no podcasts to bring audio storytelling to the millions who now listen to their favorite programming through the multitude of services that provide podcasts on almost any subject. There was no Alexa to bring Amazon and other music services into the home – in fact Amazon itself had only begun selling books online in 1995. Even Sirius XM (then Sirius and XM as two competing companies) had not initiated their services at the time of the 1996 Act – as XM did not start providing service to consumers for another 5 years (with Sirius launching a year later). And the pace of change for audio technology is not slowing.
Continue Reading What’s Next for the FCC’s Radio Ownership Rules? – Do Changes in the Audio Marketplace Justify Changes in Ownership Limits?

April brings with it a milestone – as it is the end of the first quarter since all radio stations have had to have their online public inspection file “live” so that anyone, anywhere, can view a station’s compliance with rules that previously could only be judged by going to the station and reviewing the paper public file. April 10, in particular, is important, as it is when Quarterly Issues Programs Lists, summarizing the most important issues facing the community which the broadcaster serves and the programs that the broadcaster aired to address those issues, must be in the online public file for all full-power radio and TV stations. We wrote about the importance of these sometimes overlooked documents here, as these are the only FCC-mandated documents that reflect how a station has served the needs and interests of its community. We have also noted that, in the past license renewal cycle, missing Quarterly Issues Programs lists were the source of the most fines issued to broadcasters. Now that compliance can be judged at any time by the FCC, their importance is only magnified. So be sure that you get these documents into your online public file by April 10.

EEO Public Inspection File Reports, summarizing a station’s employment record for the prior year, are also to be uploaded to a station’s online public file. For radio and TV stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, these reports need to be completed and included in the public file by April 1 by all stations that are part of employment units with 5 or more full-time (30 hours per week) employees. In addition, radio stations in employment units with 11 or more full-time employees in Delaware and Pennsylvania, and TV stations in Texas with 5 or more full-time employees, also need to file EEO Mid-Term Reports, commonly referred to as FCC Form 397 applications. While the FCC is considering the abolition of the Mid-Term Report (see our article here), the obligation is still in place so, for now, stations must comply.
Continue Reading April Regulatory Dates for Broadcasters – First Quarterly Issues Programs Lists in Online Public File for All Radio Stations and Other Important Dates

On Friday, the FCC released a Public Notice announcing that the rules requiring the inclusion in the online public file of TV station “shared services agreements” is now effective after having been approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act. This obligation for TV stations to put in their…

At its open meeting yesterday, the FCC adopted a Notice of Proposed Rulemaking looking to ease the paperwork involved in the sale of a satellite television station – i.e. a station, usually in a smaller market that is associated (and often rebroadcasts) another station in that market. As we wrote here when we summarized the…

The FCC last week released its tentative agenda for its March open meeting. On it was a single item dealing with broadcast issues, a draft Notice of Proposed Rulemaking proposing to ease the paperwork involved in the sale of a satellite TV station. This item is another action as part of its Modernization of Media Regulation Initiative seeking to lessen the paperwork and regulatory burdens of broadcasters. Similar to other actions taken as part of this initiative (see our article here), this proposal is a small step to reduce burdens on a small class of broadcasters – but at least it is another step that is being taken in this initiative. The draft proposal will be considered at the FCC’s meeting scheduled for March 22.

Under current FCC rules, the FCC will authorize an owner to acquire a second full-power television station in a market, a station which will not count against FCC ownership limits, if the applicant can meet a three part test – (1) the station will not have city-grade overlap with the “parent” station, (2) the satellite station will serve an underserved area, and (3) a showing is made that there is no other owner ready to acquire an existing station or activate an unused channel and operate it as a stand-alone station. Satellite television stations were traditionally used in geographically-expansive rural markets to expand the coverage of a parent station to reach outlying areas. In more recent years, as the Commission abolished the requirement that the satellite primarily duplicate the programming of the parent station, these stations have sometimes been used to provide alternate programming in smaller markets unable to economically support an independent operation. The draft NPRM released by the FCC seeks to address the issue of what happens when such stations are sold.
Continue Reading Next Media Regulation Modernization Item – Easing Transfer of Satellite TV Stations

March is one of those months where without the Annual EEO Public File Reports that come up for different states every other month, or without the Quarterly Issues Programs List and Children’s Television Report obligations that arise following the end of every calendar quarter. But this March has two very significant deadlines right at the beginning of the month – Online Public Files for radio and Biennial Ownership Reports – that will impose obligations on most broadcasters.

For radio stations, March 1 is the deadline for activating your online public inspection file. While TV stations and larger radio clusters in the Top 50 markets have already made the conversion to the online public file, for radio stations in smaller markets, the requirement that your file be complete and active is Thursday. As we wrote here, there are a number of documents that each station should be uploading to their file before the deadline (including Quarterly Issues Programs Lists and, if a station is part of an employment unit with 5 or more full-time employees, Annual EEO Public Inspection File Reports). As the FCC-hosted online public file date-stamps every document entered into the file, and as the file can be reviewed by anyone at anytime from anywhere in the world, stations need to be sure that they are timely uploading these documents to the file, as who knows who may be watching your compliance with FCC requirements. And this is not the only big obligation for broadcasters coming up in March.
Continue Reading March Regulatory Dates for Broadcasters – Including Online Public File for Radio and Biennial Ownership Reports, Effective Date of ATSC 3.0, Comments on TV National Ownership and Media Modernization, and GMR Extension

In a very short order, the US Court of Appeals for the Third Circuit denied the request filed by certain public interest groups that had asked that the Court stop the new FCC ownership rules from taking effect and suggesting that a special master be appointed to oversee the FCC’s ownership review process. We wrote…