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FCC ponders the future of radio consolidation

The Federal Communications Commission is reviewing its media ownership rules again. That ordeal took up quite a bit of public bandwidth over the last decade, especially after former FCC Chair Michael Powell proposed scotching most of them. Now we’re back to square one, with the Commission launching a Notice of Inquiry about its current ownership limits, including its Local Radio Ownership Rule, which reads as follows:

“a person or entity may own, operate, or control: (1) up to eight commercial radio stations, not more than five of which are in the same service (i.e., AM or FM), in a radio market with 45 or more radio stations; (2) up to seven commercial radio stations, not more than four of which are in the same service, in a radio market with between 30 and 44 (inclusive) radio stations; (3) up to six commercial radio stations, not more than four of which are in the same service, in a radio market with between 15 and 29 (inclusive) radio stations; and (4) up to five commercial radio stations, not more than three of which are in the same service, in a radio market with 14 or fewer radio stations, except that an entity may not own, operate, or control more than 50 percent of the stations in such a market unless the combination of stations comprises not more than one AM and one FM station.”

There’s also the radio/television cross ownership rule, which allows a person or entity

“to own up to two television stations (to the extent permitted under the local television ownership rule) and up to six radio stations (to the extent permitted under the local radio ownership rule) in a market where at least 20 independently owned media voices would remain post-merger. In markets where parties may own a combination of two television stations and six radio stations, the rule allows a party alternatively to own one television station and seven radio stations. A party may own up to two television stations (where permitted under the current local television ownership rule) and up to four radio stations (where permitted under the local radio ownership rule) in markets where, post-merger, at least 10 independently owned media voices would remain. The rule allows a combination of two television stations (where permitted under the local television ownership rule) and one radio station regardless of the number of voices remaining in the market.”

Since Congress established the radio rule in 1996 and the FCC set up the TV/radio rule three years later, empires have risen and, it appears, are poised to fall. These rules greatly relaxed previous ownership limits. Indeed, once upon a time, the agency limited national broadcast media ownership to the “7-7-7” rule: seven FM, seven AM, seven TV stations. Thus, Clear Channel famously gobbled over over 1,200 stations, automated many of them, then over leveraged itself to the point of collapse. Ditto for Citadel and much of the rest of the industry.

In 1996, there were 10,257 commercial radio stations with 5,133 owners, the FCC notes. Today, there are less commercial stations and 39% less owners: 11,202 and 3,143, respectively. Advertising revenue for radio has fallen by almost 11 percent between 2006 and 2008. And between 2008 and 2009, revenue for radio fell by about 22%.

“In contrast, total Internet advertising revenues rose: 25% between 2006 and 2008, but dropped 5% between 2008 and 2009,” the Commission adds.

So do we still need radio ownership limits? The FCC wants to know:

“Are the current numerical limits appropriate to achieve the goals of the local radio ownership rule? The local radio ownership rule currently distinguishes between AM and FM services. Does it continue to make sense to have sub-caps for the two services? Have recent technological advances eliminated the need for this aspect of the rule? What part should low-power FM stations play in the rule? Should we account for other sources of audio programming in applying the rule? Should the degree of consolidation of other media in the local market be a factor in the rule, or should we continue to count only the number of radio stations in a market in applying the rule? Should this rule take account of market share?”

If you want to help the FCC with these questions, you can post a comment here. We’d be interested in your thoughts as well, either via a comment below, or send us an e-mail. The Commission also has a lot of questions about localism, which we’ll consider in a later post.

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One Response to FCC ponders the future of radio consolidation

  1. Eric May 29, 2010 at 11:02 am #

    I think that national corporate ownership of local radio and TV should be permanently banned. It’s taken control away from local owners and general managers, many of whom have actually mismanaged the industry by refusing to hire less expensive, local talent instead of contributing to the exorbitant salaries paid to nationally-syndicated pseudo-personalities like Rush Limbaugh and Glenn Beck. Ownership by only local or regional broadcasters is the best way to go, along with a permanent ban on the practice of “voicetracking”, forcing radio to return to being live and local 24 hours a day, seven days a week.

    In addition, I think that secular corporate ownership of religious radio stations should also be permanently banned. The question on this issue is not free speech, but the Constitution’s guarantee of the separation of church and state, which should also be extended to guarantee the separation of church and secular business. Religious radio, especially Christian radio, should be the exclusive domain of the houses of worship, as well as business people committed to their faith. Corporate ownership not only taints the mission of religious radio as an outreach of their ministries, but is also in violation of religous teaching. Corporate ownership of Christian radio is also against the Bible. For the apostle Paul reads in his First Letter to Timothy: “For the love of money is the root of all evil.” (1 Timothy 6:10) Profiting off the Bible, as well as secular corporate ownership of religious radio, is a blasphemy against God, and should never be tolerated by anyone.

    The current numerical limits are too loose…they should be severely tightened. Programming and the areas that are served should be the primary area of consideration. For instance, if I were to buy a radio station in the St. Louis market, and want to serve the entire market, then I should own no more than two radio stations (one AM, one FM). If I were to serve underserved areas of St. Louis, like northern St. Louis County (which is grossly underserved…the area is only served by a single 100-watt non-commercial FM station), western St. Louis County (which lost its only radio service when the YMCA of West County sold its 120-watt non-commercial FM station), or the Metro East (which is insufficiently served by a low-powered AM in Alton, and rim-shot FMs from Breese and Okawville). If you want to serve underserved areas away from the main city, then you should be allowed no more than four stations (all four can be AM but cannot be FM) in that particular area. One of the most tragic results of deregulation is what has happened in Anniston and Gadsden, AL. Anniston lost its only commercial FM station when the former WHMA-FM (100.5 MHz) moved to a Birmingham suburb, while adding an unneeded Class C3 assignment to the oversaturated Atlanta market. Anniston’s only commercial service is WAAX (570 kHz). Gadsden lost its only commercial FM when WQEN (103.7 FM) moved to another suburb of overserved Birmingham. The only commercial radio service in Gadsden is WJBY (1390 kHz). WGAD moved to 930 kHz in nearby Rainbow City a few years ago in a swap with WJBY. The LPFM limits should stay for now.

    There should also be an end to discrimination against homegrown talent in on-air employment. In my home market (St. Louis, MO), there are many talented radio personalities who were born and raised in the market, and trained for the radio business in top community college programs like the ones at St. Louis Community College at Florissant Valley and Lewis and Clark Community College, or university programs like the one at Lindenwood University. College and university radio stations should be the only sources for new talent for the radio industry…that would bring legitimacy to college radio as a whole, and give declining broadcasting programs like the one at Southern Illinois University Edwardsville a much-needed shot in the arm. People with disabilities have also been negatively affected…too many people with even minor disabilities aren’t allowed to obtain behind-the-scenes employment in radio. In the years I had been looking for broadcast employment before giving up in April 2001, I had never seen anyone working at a radio station who was confined to a wheelchair or needed assistance walking. Discrimination against a person with a disability in broadcast employment is in violation of the Americans with Disabilities Act.

    As far as technology is concerned, the FCC should permanently revoke type acceptance for the “HD Radio” system. It is wasteful of valuable radio spectrum; depending on where you are located in relation to the transmitter site, “HD Radio”, or In-Band, On-Channel Digital Audio Broadcasting, wastes up to 100 kHz of valuable AM spectrum, as well as 1-4 MHz of valuable FM spectrum space. Several years ago, I took a sample of KFUO (850 kHz) and how damaging its digital sidebands were at a range of one mile from their transmitter site…and their signal interfered with KREI (800 kHz) in Farmington, MO, wiped out 810-840, 860, 870 and 890 kHz, severely interfering with WIJR (880 kHz), a Spanish language radio station based in Highland, IL, and interfered with KFAL (900 kHz) in Fulton, MO. One of the local Catholic radio stations, WRYT (1080 kHz) in Edwardsville, IL, is regularly interfered with by the digital sidebands from KMOX (1120 kHz) in St. Louis. On FM, I can no longer hear stations like KDJR (100.1 MHz) in De Soto, MO or WNSV (104.7 FM) in Nashville, IL because of the digital sidebands from WSDD (100.3 MHz) in Alton, IL and KMJM (104.9 MHz) in Columbia, IL, both owned by Clear Channel. The same is true for WOLG (95.9 MHz) in Carlinville, IL…largely blocked by the digital sidebands from Radio One’s WFUN-FM (95.5 MHz) in Bethalto, IL and Emmis Communications’ KIHT (96.3 MHz) in St. Louis. The only places in the radio spectrum that has room for digital audio broadcasting are on bands above 1000 MHz (1 GHz). There is no room for digital audio broadcasting on the AM or FM bands, which should be analog only.

    I have not worked commercially since 1999; I’ve only worked for St. Louis based owners like Bob Howe and the late Chuck Norman. I also worked in Christian radio for a church-owned station in Marietta, GA. I have never had the opportunity to work for a corporate entity…Clear Channel wouldn’t even let me apply for an on-air job with 103.3 KLOU in the summer of 2000. I had to end a 22-year broadcasting career after I got permanently laid off from my morning drive DJ position at one of the top jazz stations in the Midwest last July due to Bush-era cuts to public broadcasting.

    It’s time for the radio industry to deconsolidate…consolidation has had a very negative effect on the job prospects of many broadcasters, young and old alike. It’s also had a very negative effect on me.

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