NAB Urges FCC to Modernize Broadcasting Ownership Regulations

RADIO ONLINE | Friday, September 3, 2021 | 9:58am CT

In comments filled with the FCC, the National Association of Broadcasters said the regulatory framework governing ownership of broadcast radio and television stations harms broadcasters' ability to compete in the marketplace, impedes localism and fails to promote diversity in ownership.

Local radio and television stations operate under media ownership restrictions that date back decades to the analog era and fail to account for changes in the marketplace, NAB said in its comments as part of the FCC's 2018 quadrennial review of broadcast ownership rules. These outdated media ownership rules, which no longer enable broadcasters to viably operate in a competitive market or effectively serve the public interest, are in more urgent need of reform than ever, NAB said.

In its comments, NAB argued that, with the decline in the newspaper industry, broadcast radio and television stations are among the few entities still capable of producing local news, weather, sports and emergency journalism. These newsgathering ventures require high capital and operating costs, which could be alleviated by leveraging economies of scale.

However, the FCC's media ownership rules prevent broadcasters from achieving the scale necessary to sustainably provide local journalism to their communities of service, NAB said. The Commission's rules have failed to account for increased competition from giant technology platforms for advertising revenue. In addition, with the COVID-19 pandemic continuing to affect advertising and changing Americans' content consumption habits, it is imperative for the FCC to update media ownership rules to allow broadcasters to create an economically feasible future for local journalism.

"In assessing competition, the FCC can no longer maintain the fiction that broadcast stations compete only against other broadcast stations," said NAB in its comments.

"Given the record evidence... the FCC must conclude that its local ownership rules are no longer necessary in the public interest as the result of competition." The FCC has for decades also attempted to increase broadcast stations owned by women and people of color. Yet, the Commission has continuously failed to recognize its rules have discouraged investment in station ownership. While lack of access to capital is the primary barrier preventing these underrepresented populations from acquiring radio and television stations, the imposition of heavy regulatory burdens on broadcasting - including restricting the size and scale of a station group - discourages potential entrants, NAB said.

"[E]ven if capital were more accessible, the FCC's continued insistence on heavily regulating broadcasters - including through outdated ownership rules - is a clear disincentive to investment and new entry," said NAB in its comments. "In a world where investors and new entrants have countless other media and communications options, the Commission itself is a major impediment to increased diversity in the broadcast industry."

In its comments, NAB urged the FCC to adopt proposed media ownership reforms offered by NAB in 2019. For its rules governing the broadcast radio industry, NAB recommended the Commission: eliminate caps on AM ownership in all markets; permit a single entity to own up to eight commercial FM stations in Nielsen Audio 1-75 markets, with the opportunity to own two more FM stations through successful participation in the FCC's incubator program; and remove restrictions on FM station ownership in Nielsen markets 76 and lower and in unrated areas.

NAB recommended that the FCC also no longer retain per se restrictions that ban combinations among top-four rated TV stations, regardless of their audience or advertising shares, and that prevent ownership of more than two stations in all markets, regardless of their competitive positions.

"The FCC should act now to fulfill both [its] deregulatory mandate, and Congress's even longer-standing goal of a competitively viable broadcast service capable of serving local communities, by modernizing its local radio and TV ownership limits," said NAB. "The American public cannot afford for the FCC to remain asleep at the regulatory wheel."