Looks like the final showdown on radio ownership rules is about to go down, and the stakes are higher than ever.
With the Federal Communications Commission (FCC) approaching a decision on its 2022 Quadrennial Review of local radio ownership rules, broadcasting groups and industry advocates are making their last pitches. The arguments are varied, with broadcasters advocating for the elimination of decades-old ownership limits, while others caution against deregulation.
A coalition of broadcasters, including Connoisseur Media, Midwest Communications, and Townsquare Media, has taken a strong stance, asserting that the current Local Radio Ownership Rule is outdated. They argue that the media environment has shifted dramatically since these rules were established, and radio must adapt to survive in a digital age dominated by platforms like Spotify and Apple Music. In their joint comments, the broadcasters emphasized that the competition radio faces has never been fiercer, particularly in audience retention and advertising revenue.
The broadcasters cite Section 202(h) of the Telecommunications Act of 1996 as a basis for their call to deregulate, which mandates that the FCC must consider market changes before reinforcing ownership restrictions. They argue that current competition dynamics necessitate a reevaluation of the Local Radio Ownership Rule to avoid stifling investment and innovation in the sector. The National Association of Broadcasters (NAB) has echoed these sentiments, declaring that the existing ownership limits create a “vicious cycle” that prevents investment and ultimately leads to a decline in audience engagement and ad revenue.
However, other groups, including musicFIRST Coalition and the Future of Music Coalition, are pushing back against these arguments. They contend that ownership caps are essential for maintaining competitive local radio, which they believe has suffered due to consolidation. Critics argue that preserving these limits is key to ensuring musical diversity in playlists and fostering a more vibrant listening experience for audiences.
Broadcasters rebut these claims, suggesting that if consolidation has led to predictability in playlists, reinforcing current ownership rules won’t restore creativity in programming. The broadcasters assert that musicFIRST’s push for new performance royalties would add financial burdens to radio stations already struggling under existing operational costs, calling it a misguided approach that could weaken the industry as a whole.
The debate also touches on minority ownership issues, with the National Association of Black Owned Broadcasters (NABOB) arguing ownership caps are vital for protecting Black-owned radio stations. Broadcasters counter this by stating that the real challenge lies in securing capital for these stations rather than ownership limitations. They argue that current market conditions, characterized by low station valuations, should encourage new entries into broadcasting, yet investment remains stagnant.
Amidst these discussions, the National Religious Broadcasters (NRB) has suggested a hybrid approach, supporting the removal of AM ownership caps while retaining FM limits to protect localism and viewpoint diversity. Meanwhile, Salem Media Group has proposed a middle-ground strategy, advocating for the elimination of AM ownership caps and a modest increase in FM ownership limits, aimed at enabling broadcasters to compete against unregulated digital platforms.
As the FCC prepares to review these final comments, it’s clear that the broadcasting sector is at a crossroads. Most parties agree that radio’s biggest challenges stem not from within the industry, but from the ever-expanding digital audio landscape that operates without the same level of regulatory scrutiny.