It's pretty obvious to me what's driving this and the other proposals mentioned in the Inside Radio article.
Politicians like to be interviewed. They like having coverage of their activities within a context that has demonstrated credibility. They want to get their points across. Traditional local media have been an effective mechanism for them to do that. Politicians obviously want that to demonstrate their effectiveness and, often, to get re-elected. The trade-off has mostly been that the local media also serve, or like to think they serve, a "watchdog" role. This is done to establish that context of credibility and demonstrate independence. Different media have had different levels of effectiveness in this role.
There are fewer local media and the ones remaining don't provide the kind of coverage they once did. Websites and social media sites have been a partial replacement, but don't have the reach or the perceived credibility that independent, traditional reporting have had. Political coverage is largely national; most politicians don't have a national presence, even the ones in Congress.
So Congressional representatives, especially those with mostly a local profile, are anxious. They, and/or their staffers, are looking for proposals that will bring that coverage back.
I am very uneasy with direct government subsidies to local outlets, whether they're newspapers, radio, or TV. Once that dependency is established, it could easily be abused. It's also kind of a throwback to the 19th century, where the publication of official notices was a major source of income for newspapers, one easily withheld if officials didn't like the coverage they were getting. This still happens in countries that have had difficulty establishing a tradition of independence from official influence.
The FCC proposal is different and, in my estimation, just a little bit weird. There is precedent - tax certificates for sales to minority owners is one. The Commission does have the ability to set rules for routine operations. If a station owner doesn't like those rules, that owner can always turn in their license, quit broadcasting, and rely on streaming for income, unencumbered by any FCC regulations. Station owners are not automatically entitled to their licenses.
An important component of regulation, though, is predictability and regularity. Standards that are applied should, to the extent practicable, be based on objective criteria. I wonder how those principles would be applied in this instance. Local programming could be just about anything, at any time.
Economic arguments have been made in this thread. To be candid, those arguments aren't going to work with the proponents of this proposal. The purpose of this and similar proposals is to promote a certain vision of public benefit that isn't connected with economic viability.
You also have to get used to the fact that radio and television stations are, by definition, political actors because a government agency that has to consider politics is supervising them. That was necessary due to the requirements of RF engineering (e.g. preventing interference). The challenge when such powers are granted is to avoid the temptation to censor content. A proposal to provide incentives to promote local content, without controlling what the local content would be, does not appear to cross the line into censorship.
It does upset the ability of a business to control what it does. That is hardly unique.
I think, instead of huffing and puffing and getting red in the face, broadcasters would be better served by understanding where the impetus for this type of proposal originates, analyzing the objectives of such proposals, and figuring out a way of going at least partway toward those objectives in a workable matter. Most likely what will happen is that certain public-service initiatives will be offered, the FCC proposal will be dropped or severely modified, everyone will move on, and then, a year or two later, those initiatives will be quietly dropped.
In other words, don't play angry but play smart.