Posted on Tuesday, October 5, 2021

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In Reply Comments filed with the FCC regarding the 2018 Quadrennial Regulatory Review of the Commission's broadcast ownership rules, NAB notes that the concept of competition in the initial comments submitted by parties opposing reform of local radio and TV structural rules are "notably absent." The trade group said that commenters supporting, or even calling for tightening, the "outdated rules" ignore that broadcast stations in a highly competitive commercial marketplace upended by digital technologies cannot function unless they remain economically viable.

According to NAB, the quadrennial review has failed to take account of marketplace competition and ignored "the key role competition plays under the statute governing the FCC's ownership reviews." NAB suspects that this "yawning gap" reflects these parties' belief that diverting attention away from competition "is their only hope for the retention of broadcast-only restrictions stemming from the analog era or, indeed, from the World War II era."

"Some commenters even contended that the Supreme Court in Prometheus had approved a reading of Section 202(h) giving no prominence to competition and had affirmed the FCC's full discretion to implement its conception of the public interest as to diversity. In fact, the Court did not 'affirm' any such thing, as it did not reach any arguments about the interpretation and application of Section 202(h) and expressly left open questions about the FCC's authority under Section 202(h) to consider minority and female ownership in its quadrennial reviews," wrote NAB.

NAB says it has long supported and continues to actively support measures, including but not limited to reinstatement of the tax certificate policy, that may effectively promote new entry and diverse ownership by addressing the primary obstacle facing potential female and minority broadcasters: the lack of access to capital.

"A number of commenters, however, still support retaining structural ownership rules, which do not even address access to capital, in the vain hope that those rules will somehow materially increase ownership diversity in the future, despite having failed to do so for the past 80 years. These parties' solution to the problem of low levels of minority and female ownership - mandating an eighth and ninth decade of asymmetric ownership restrictions that discourage investment in a competitively -- struggling broadcast industry - is illusory," the NAB contiuned.

"Finally, and unsurprisingly, several commenters opposing any reform of the existing local radio rules merely repeated their calls for no rule changes, without providing evidence about audio or advertising market competition or recent marketplace developments," said NAB. "The FCC should give little weight to comments neglecting to address the questions raised in the Public Notice and, more importantly, failing to undertake any competitive analysis of the radio industry, as Section 202(h) requires."

In contrast, NAB said ten radio broadcasters provided extensive updated data showing declines in the amount of time Americans spend listening to terrestrial radio, due to competition from streaming and further documenting the erosion of broadcasters' share of local advertising, due to competition primarily from large digital platforms.

NAB now supplements data showing the drop in the radio industry's advertising revenues over time with additional data demonstrating that FM stations have experienced ad revenue declines mirroring the industry as a whole. For these reasons, NAB again urges adoption of its proposal for reforming the local radio rules to provide maximum regulatory relief to AM radio and meaningful relief to FM radio.