NAB Wants FCC to Eliminate Competition Rules Limiting Ownership

With the FCC about to embark on the review it does every four years of whether its broadcast ownership rules remain necessary in the public interest of competition, Billboard reports the National Association of Broadcasters is encouraging the agency to relax, if not eliminate all together, any restrictions on how many stations a single owner can have in one market.

Currently, the FCC allows each radio broadcaster to own or control six FM stations and two AM stations in a major market (the FCC limits depend on size of markets).

In its review, FCC will look at the overall marketplace to decide if any adjustments are needed. As part of that review, it asks interested parties for comments; while that hasn't happened yet, the NAB and two music industry groups have pro-actively submitted comments in advance of the review process.

In a letter to the FCC and in comments to the agency, the NAB says it doesn't believe the existing radio ownership limits are needed to promote competition in today's audio marketplace.

In contrast, the Music First coalition of industry trade groups and the Future of Music, working together in a joint comment, are encouraging the FCC to keep restrictions in place, arguing that further consolidation will impact diversity of programming, and thus the public interest.

The NAB's argument is based on how the competition for listeners' time has changed dramatically due to new business models from satellite and digital radio, and on-demand services, let alone Facebook and YouTube. "The Commission cannot continue to ignore multiple major sources of competition for both listeners and advertisers in the audio marketplace," the NAB's letter says.

But the music industry counters that the radio industry already owns an advantage over all other audio delivery platforms in that terrestrial radio doesn't have to license and pay royalties to record labels and artists; while all the other audio content delivery platforms make such payments.

The NAB dismisses that component of the music industry's response as irrelevant because it has nothing to do with keeping a vibrant consumer offering through competition on behalf of the public interest.

In a letter to the FCC in June, the NAB said radio ownership limits are not needed to promote competition, adding it should be  "unencumbered by regulatory restrictions" in order for terrestrial radio to remain a meaningful competitor.

But if the FCC decides that it still needs to regulate broadcast radio ownership, then the limitations should be relaxed so that in the top 75 Nielsen Audio market -- the major metropolitan markets -- a single entity can own or control up to eight commercial FM stations with no limit on AM ownership.

Moreover, the NAB suggests that if an owner has reached the 8 FM stations it is proposing as the new limit, if that owner participates in the FCC incubator program it can be affiliated with 10 FM stations in one major market.

Furthermore, outside the top 75 markets, the NAB argues there should be no restrictions whatsoever on radio station ownership in the smaller markets.