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.