NAB Subcap Plan 'Worthy,' Also 'Merit' in Even More Relaxation, O'Rielly Tells Radio Show
ORLANDO -- FCC Commissioner Mike O'Rielly spoke favorably of NAB's subcap proposal at Radio Show 2018 Thursday and suggested he would be open to even more relaxation of those rules. Just a few hours before O'Rielly's speech, Audio Division Chief Albert Shuldiner warned in a separate panel that the industry should be more cautious about anticipating aggressive relaxation of the rules.
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“I'm a little concerned that the banter in the industry is getting a little bit ahead of the FCC on this topic,” Shuldiner said. In his speech, O'Rielly spoke positively of NAB's plan to eliminate subcaps outside the top 75 markets, said limiting subcaps to the top 25 could also make sense, and added he would be interested to see more in the record about “drawing such lines, if any are needed at all.”
O'Rielly said he remains “open minded” about the 2018 quadrennial review, and later told Communications Daily he isn't endorsing any specific proposal, but his speech highlighted the NAB plan and called it “worthy of the commission's consideration.” O'Rielly also said he “sees merit” in “full elimination” of the subcaps, but the NAB plan could be a good first step.
Relaxation of the subcaps likely won't lead to the destruction of the AM band, O'Rielly said. “The stations that may be sold would likely be the unprofitable stations that were not the most attractive investment opportunities anyway,” he said. Neuhoff Communications CEO Beth Neuhoff said action to relax the subcaps is “extremely important” to allow radio groups to remain competitive.
Chairman Ajit Pai has agreed the review effort will include the question of how media markets should be defined, O'Rielly said. “All relevant participants must be included in any media market definition,” O'Rielly said. By not recognizing that broadcasters face competition from tech companies and other entities outside broadcasting, “we penalize longstanding providers, such as the radio industry, skewing the market in favor of unregulated industries,” he said.
O'Rielly said he can't be sure when the FCC will take up the quadrennial review, but he expects it later this year. The FCC has to take its time establishing a record because of a certain court challenge from anti-consolidation groups. O'Rielly said he “tries to say a couple prayers at night” that the 3rd Circuit will finally allow a quadrennial review order to stand.
The commissioner also condemned court action on the FCC's incubator program, which has been the focus of criticism from members of the agency's own diversity advisory committee and the subject of an appeal from the Prometheus Radio Project (see 1809040065). “I am concerned that litigation in this space will further delay the incubator program’s implementation, exacerbating our abysmally low number of women-owned and -controlled and African American-owned and -controlled radio stations,” he said. O'Rielly will object to tightening the program's rules allowing ownership waivers for markets comparable to the ones in which incubation occurs, he said.
Relaxing the subcaps won't necessarily undercut the incentives offered by the incubator program, O'Rielly told us. Impacts to the program would be among the considerations in any subcap proposal that's adopted, he said. Incubator applications will be “closely monitored” to prevent fraud and abuse, Shuldiner said.
The FCC has “heard” the industry “consternation” over proposals to address FM translator interference by invalidating complaints outside a 54 dBU contour, Shuldiner said. The agency will try to find a balance that protects translators and addresses the concerns of full-power stations he said. Shuldiner declined to go into specific plans, but Fletcher Heald broadcast attorney Matthew McCormick said he believes those comments and the strong industry pushback could mean the final rule will contain a less restrictive contour, or no hard line at all.
Eight media modernization items are waiting in the wings, but the FCC is on the hunt for more and looking for suggestions, O'Rielly said. Shuldiner said none affecting radio is likely to be acted on this year, but some action is possible in 2019. Wilkinson Barker broadcast attorney David Oxenford said the FCC could soon need to start addressing more substantive media modernization items, such as the equal employment opportunity rules. The agency has largely cleared away the “low-hanging fruit,” he said.