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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?

The FCC recently issued a Notice of Inquiry, asking if it should consider mandating that XM Sirius receivers also be able to receive HD Radio or to play material from other audio sources.  This proceeding was promised as part of the FCC’s approval of the XM-Sirius merger, as a potential way of ensuring that competition in the audio entertainment marketplace remained robust after the merger.  While the Commission required that XM Sirius allow manufacturers to build receivers that could incorporate HD Radio or other audio entertainment technologies (e.g. MP3 player, Internet connectivity, etc), it did not require that any receiver contain such technology.  This proceeding asks if any sort of requirement along these lines should be adopted.  It also seeks information generally about the audio entertainment marketplace.

Specific questions posed by the FCC in this proceeding include:

  • Would a mandate promote lower prices and more choices for consumers of audio entertainment?
  • Should it be expected that audio devices with multiple audio entertainment capabilities will be developed without an FCC mandate?
  • Would an XM Sirius radio with HD Radio capability promote dissemination of state-level EAS messages?
  • How well has HD Radio been developing on its own?
  • Would multi-function devices facilitate the development of HD Radio?
  • Are such devices necessary for the development of HD Radio?
  • What other public interest benefits, if any, would result from such a combinations?
  • What technological issues would there be in multifunction devices (e.g. manufacturing cost, battery life, size and weight, interference, etc.)?
  • If a requirement was adopted, how long would any required phase-in period need to be?
  • Should any requirement cover all radios, or just certain types (e.g. in-car, portables, home receivers, etc)?
  • Does the FCC have the authority to adopt any such mandate?

That last issue, the FCC statutory authority to adopt rules in this area, is a general question considered in several other recent FCC proceedings (for instance, see out post here).  Just because the FCC might think that something is a good idea does not mean that it can adopt rules in an area.  Rules requiring that equipment manufacturers take certain actions have run into problems in the Court of Appeals in the recent past as the FCC has only limited jurisdiction over such manufacturers, so any mandate here will need careful justification or perhaps even a specific statutory mandate.Continue Reading FCC Begins Inquiry on Mandate for HD Radio on XM Sirius Receivers