Low-Power Radio Has Little Financial Impact on Full-Power Outlets, FCC Study Says
Low-power radio has little economic impact on full-service stations in the same market, an FCC study for Congress said. The study of all 835 “active” U.S. low-power FM stations -- which compares to 6,468 full-service commercial stations -- pointed to LPFM outlets’ low listenership figures. It also found low LPFM revenue figures and listed regulatory obstacles that limit coverage areas. Half the portion of LPFM stations have websites as do commercial full-power FM broadcasters, which are three times more likely to stream their audio online, the Media Bureau analysis said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
LPFM backers including Rep. Mike Doyle, D-Pa., who sponsored the legislation requiring the study, said it shows those stations don’t hurt commercial ones. That belies some commercial broadcasters’ fears that if the FCC allows for the construction of more LPFM stations, as envisioned by the legislation, they'll be hurt, said Media Access Project Senior Vice President Andrew Schwartzman. The average LPFM station is listened to by 0.2 percent of the “radio listening population,” the bureau said. “The vast majority” of low-power outlets have audiences so small that ratings firm Arbitron doesn’t appear to count the broadcaster, the bureau said. NAB is reviewing the analysis, a spokesman said.
Thirteen LPFMs would have to be added to a market to have a “discernible” effect on Arbitron ratings of a commercial station operating in the same geographic contour, the bureau said. That’s a case where a full-power station’s ratings among listeners 12 and older would decline by 0.1 point. The study also used data from the commission’s Consolidated Database System and from researcher BIA/Kelsey to draw its conclusions. A statistical regression analysis had conflicting results, but no “reliable evidence” showed LPFM has a “substantial or consistent impact on full-service commercial FM stations,” the study said. It was sent to Congress Wednesday, when it was due under last year’s Local Community Radio Act, and released Thursday. Bureau Chief Bill Lake signed it (http://xrl.us/bmnu23).
LPFMs have more varied formats than commercial outlets on the same band, with far smaller revenue figures and number of potential listeners reached, the study found. It said full powers reach an average of 30 times the population of low powers, and LPFMs are all noncommercial, educational (NCE) stations and tend to be in rural areas. “Due to their higher power levels and antenna heights, the geographic coverage of full-service commercial FM stations is about 55 times larger than LPFM stations based on the median station,” the study said. “We believe that three important legal restrictions on LPFM stations significantly reduce the competitive threat they pose to full-service commercial FM stations in the markets for audience and advertising: (1) the requirement that LPFM stations operate at a maximum power of 100 watts; (2) the requirement that they operate on an NCE basis; and (3) the prohibition on broadcasting commercial advertisements or promotional announcements.”
Almost half of LPFM stations air religious programming, versus 5 percent of commercial full-power FM, the bureau said. “In addition, 83 percent of full-service commercial FM stations broadcast some type of music format, as compared to only 12.6 percent of LPFM stations. Moreover, LPFM stations appear to be much more likely to carry a variety of programming genres than full-service commercial FM stations.” The eight stations the bureau picked to study in further detail through interviews with their personnel found a median annual budget of $10,600, versus 2010 revenue of $723,000 last year for the median full-service commercial FM outlet. “Given their regulatory and operational constraints, LPFM stations are unlikely to have more than a negligible economic impact on full-service commercial FM stations,” the bureau said.
"The study confirmed the widespread belief that LPFMs don’t cause economic harm or interference to other stations,” as found by an earlier FCC study, Doyle said. “In fact, if you talk to the folks in the regions that already have LPFM stations, they say LPFMs have had a very positive impact.” He’s “looking forward to the upcoming LPFM licensing window so we can have many more of them.” The commission has said it may let entities seek new LPFM stations as soon as this summer. Under the legislation, the outlets can be closer on the dial to full-power FM outlets in the same area than current rules allow. The bureau’s study came up with “the intuitive result,” Schwartzman said. “The only reason this is really important is that broadcasters made a big deal of this,” said Schwartzman, who represents LPFM advocate Prometheus Radio Project. “Broadcasters wanted this section,” he said of the bill requiring the FCC report.