Broadcasters, Diversity Groups, Consolidation Opponents Divided on QR

Though many radio groups such as Alpha Media chimed in to support an NAB plan to relax radio subcaps, numerous others -- including iHeartMedia -- opposed the plan or proposed alternatives. TV broadcasters and MVPDs clashed over top-four duopolies, while NAB and diversity groups such as the National Hispanic Media Coalition were united in criticism of diversity proposals backed by the Multicultural Media, Telecom and Internet Council. “Treating people of color or their contributions as currency is, at its core, a dehumanization tactic,” said NHMC and numerous other such groups about a proposal for a tradable diversity credit system (see 1811200048).

The QR sought comment on competition in broadcasting. Many said increased competition from nonbroadcast companies for advertising dollars merits relaxation of broadcast regulations. “Advertisers have shifted ad expenditures toward online and mobile outlets, at the expense of traditional media,” said NAB. DOJ plans a two-day workshop on broadcast competition later this week (see 1904120013), but TV broadcaster Meredith said that’s no barrier to FCC action. “The FCC need not wait for the DOJ’s analysis and should lead with the recognition of the current media marketplace instead of one in stuck in past decades,” Meredith said. A lack of advertising revenue threatens to snuff out local news in smaller markets, Gray Television said.

The FCC should frame consideration of broadcast regulations in terms of competition, NAB said, chiding the NPRM for seeking comment on whether TV ownership limits are necessary to promote localism or viewpoint diversity. It “would be arbitrary and capricious” to replace the rationale for such rules if they can’t be justified due to competition, NAB said. Expanding the definition of broadcast competition is just a “craftier” strategy for deregulation, Free Press said. “Broadening the relevant market definitions is inappropriate and misguided.”

Increased competition faced by stations is why the FCC should do away with the rule restricting top-four combinations in the same market, said NAB, Nexstar and nearly every TV broadcaster in the docket. The top-four rule treats all markets equally, regardless of their individual levels of competition, Gray said. That ignores that in smaller markets, a station can be in the top four and still not be able to generate a profit, Gray said. “The Top-4 Restriction makes no sense once one leaves the 75 largest” designated market areas, it said. The company has a long-stalled application for a top-four combination in Sioux Falls, South Dakota (see 1904090063).

Retrans, Diversity

Dissolving top-four restrictions would hurt consumers through increased retransmission consent prices, said NCTA, the American Television Alliance and programmers such as MAVTV, the latter with other networks.

The FCC not only should retain the top-four rules but also tighten them to block groups from getting around them with sidecar stations or multicasting on low-power TV, ATVA and NCTA said. “It is unsurprising to find an increasing number of broadcasters turning to these means to avoid the rule,” said NCTA of multicasting and LPTV.

Gray described using LPTV stations to go around the top-four restriction. “Nothing” about carrying top-four programming or being carried on MVPD stations makes LPTV stations equivalent to full-power stations or targets for increased regulations, said LPTV group HC2.

MMTC, NHMC and other diversity and anticonsolidation groups said proposals to remove or relax broadcast regulations would hurt ownership diversity.

“There is a momentous opportunity before this Commission to reverse its course, begin to make amends for past harms,” said NHMC, Public Knowledge, the United Church of Christ Office of Communication and others. As in previous QRs, the FCC hasn’t commissioned the diversity studies required by the 3rd U.S. Circuit Court of Appeals in previous court challenges, Free Press said. “Without such analysis, any further rule modification would be premature and a reversible error too, and it would risk causing further irreparable harm to women owners and owners of color.”

The FCC shouldn’t enact the diversity proposals originally drafted by MMTC as an alternative to retaining ownership rules, said the Leadership Conference on Civil and Human Rights. “The NRPM defines these provisions in loose and incomplete terms, so we are unable to fully analyze these provisions.” MMTC’s proposals “suffer from several fatal flaws” and should be rejected as outside the FCC's authority and vulnerable to constitutional challenge, NAB said. The joint filing from NHMC and others said proposals for diversity credits would create bigger barriers for market entry. MMTC argued proposals such as applying cable procurement rules to broadcasting are within FCC authority but said the diversity metrics proposed in the NPRM should be studied by the Office of Economics and Analytics. "What these concepts need at the outset is not legal analysis but economic analysis," MMTC said.

NAB Plan

NAB's ownership plan was much debated by station owners of many types.

A large group of mid-size radio groups including Connoisseur, Eagle and Neuhoff said NAB's proposal doesn’t go far enough, and all radio ownership caps should be dissolved. NAB’s plan “is reasonable but will still burden stations with a competitive imbalance,” the joint commenters said. IHeartMedia opposed the NAB plan as “extraordinarily aggressive” and said it would cause a “mass divestiture" of AM stations. Instead, the FCC should keep FM restrictions but remove the caps on AM, iHeart said.

Smaller radio owners criticized the plan as a threat to AM and all smaller radio stations. Relaxing the subcaps “will do little” to fix radio’s market position but do much “to undermine” the FCC’s AM revitalization effort, said Salem Media. Current radio rules allowed larger group owners “to freeze out competition from operators of single AM or FM stations” and more consolidation would worsen the situation, said Mount Wilson FM Broadcasters. The FCC should retain the caps “to avoid large companies coming into radio markets and buying up all of the independently-owned radio stations,” said King City Communications.

Since most African American radio owners own AM stations, the association's plan would hurt broadcast diversity, said the National Association of Black Owned Broadcasters. Opponents of subcap deregulation cited the FCC’s fledgling radio incubator program as a likely casualty of the proposal. Removing or relaxing the subcaps “would immediately remove any incentive for a broadcaster to create an incubator program,” said MMTC in comments echoed by broadcast groups, including iHeart.

NAB and many radio broadcasters said increased competition justifies relaxing the AM/FM subcap restrictions. Radio licensees were less united. Subcap rules block stations from growing and providing increased service, said Reno Media Group. Alpha and other radio groups endorsed NAB’s plan to allow ownership of up to eight FM stations in the top 75 markets, and doing away with caps for AM stations and for FM in the lower 75 markets. "Act in a manner that reflects competitive changes to the marketplace,” Alpha said.