The current issues facing the AM radio band in the U.S. should not deter the FCC from altering existing radio ownership caps, according to Connoisseur, Townsquare, Bonneville, and other radio organizations. These groups argue that U.S. radio broadcasters are facing an existential crisis.
The FCC is currently reviewing broadcast ownership rules and has been accepting comments. Presently, in markets with 45 or more stations, one entity can own up to eight stations, including a maximum of five in the same service (AM or FM). This limit decreases with fewer stations in a market.
The National Association of Broadcasters is advocating for the removal of these restrictions, including local ownership caps, to facilitate greater industry consolidation.
Mid-West Family Broadcasting, Frandsen Family Stations, Midwest Communications, and Legend Communications have joined the aforementioned groups in their filing. These organizations disagree with musicFirst, the Future of Music Coalition, and the National Association of Black Owned Broadcasters, who caution that further FM consolidation could be detrimental to AM broadcasters.
They argue that AM issues will persist regardless of local ownership increases, noting that AM licenses are surrendered annually due to a lack of viable business opportunities. They claim that removing the Local Radio Ownership Rule would create competitive opportunities beneficial to all radio broadcasters.
The seven companies assert that the FCC must act to eliminate outdated regulations that hinder radio’s ability to compete in today’s audio market. They emphasize that U.S. radio broadcasters are struggling to compete effectively in the modern audio landscape, having lost approximately half their audience and advertising revenue over the past 12 years, even when adjusted for inflation.
They argue that the FCC should evaluate competition across the entire audio market, as broadcast radio competes directly with digital media. They also contend that consolidation will not diminish program diversity in local markets.
The groups refute claims that relaxing ownership rules will reduce format choices for listeners, stating such arguments do not hold up under scrutiny. They point out that the ownership rules are not the reason for diminished minority and local ownership; rather, competition from digital media is to blame.
To achieve greater diversity and local ownership, access to capital is essential, and the restrictions on broadcasters create barriers to that capital. They urge the commission to act promptly to enable broadcasters to establish strong local brands capable of competing with tech giants.
The outdated Local Radio Ownership Rule prevents local radio broadcasters from effectively competing in the current media landscape, which is vital to securing local advertising revenue and audience share.
The competition for both audience and advertising has intensified since the last review, and this trend is expected to continue as non-broadcast media outlets proliferate. Without relief from these restrictive ownership limits, over-the-air radio stations may struggle to maintain their service levels to local communities.
For more details, you can read their comments in PDF form.