NAB says it will make radio more "Local"

[SirRoxalot]

A, you simply refuse to acknowledge that there was more diversity of formats pre-consolidation - when we had more owners. You've yet to prove that's incorrect, and it illustrates my point that fewer owners means less diversity. You've yet to prove that raising caps wouldn't just mean more simulcasting - which would mean less diversity. The owners of big AMs want FMs to attempt to expand the reach of their current content into younger demographics. They don't want to create new programming. They think that they're being limited by the band they're on, not by the content of their programming. Yet, they don't want to give up their existing audience.

You're simply wrong, and you simply won't admit it. Quelle surprise.

 

[TheBigA]

A, you simply refuse to acknowledge that there was more diversity of formats pre-consolidation - when we had more owners.

Because there wasn't. There were fewer formats because of (1) More format duplication and (2) fewer music genres.

In markets where there are more owners each with fewer stations, you get more format duplication, because everyone wants to have stations in the major formats. Look at the smaller markets. Every owner has the same group of formats, so you end up with multiple stations in the same format, each playing basically the same music.

One easy way to prevent simulcasting is add a rule to outlaw it as the FCC did in the 60s. So you losen the caps and prevent simulcasts. No problem. But as I said earlier in the thread, and you ignored, Clear Channel owns no AM stations in NYC. They want to buy WOR to give them a talk outlet in the city. They can't because they own the maximum number, all on FM.

 

[TheBigA]

One way to compare format diversity before and after deregulation is through R&R ratings guides from the period.

[url]http://www.americanradiohistory.com/Archive-R&R/R&R-1992-2-Spring-92.pdf [/url]

http://www.americanradiohistory.com/Archive-R&R/R&R-2008-2-Spring-08.pdf

So comparing 1992 to 2008, you'll see there are slightly more formats in 2008. The differences are obvious, in that there are formats now that didn't exist 15 years ago like Classic Hits. Then when you look at the sub-formats, and breakdowns within the major groups, there are even more.

Obviously it doesn't show individual market analysis. So you'll bring up how Buffalo was different from the rest of the country.

 

[SirRoxalot]

If you look carefully at the two reports, and at stations in a major market that represent those formats, you'll see two things:

1. There are more labels in 2008 that would easily fit under 1992 categories.

2. There's more ethnic broadcasting in 2008, simply because there are more ethnic owners. More owners brought more diversity.

Buffalo is different from the rest of the country. NYC is different from the rest of the country. LA is different from the rest of the country. Need I go on? Radio is inherently LOCAL, and should be programmed that way. Every market has its own quirks.

Clear Channel wants an AM talker because they don't have one. They just don't want to give up one of their FMs to make that happen. All they have to do is sell one of their FMs and buy from Buckley, or switch an FM to News/Talk - as a lot of other groups with big AM talkers are doing. The cap is there to prevent them from having any more stations, period. I'm pretty sure that any of the other major groups would swap a full-market AM for a full market FM in a New York minute.

 

[TheBigA]

This is why I normally don't waste time with proof for you. You refuse to accept it. You'd rather hold to your own opinions, which you feel are more correct than any facts.

The reason a format was given its own category was because it became big enough for one. The reason it became big enough is because more stations are using that format. If you go to the 1960s, you'll see there were less than ten actual formats used by radio, and a lot of the formats in 1992 could easily fit into those ten.

As for ethnic formats and ownership, I think a look at the FCC statistics will show that in the last 15 years the number of owners has not grown in size equivalent to the growth of ethnic programming. So it's not "more owners," as you said, but different owners. No big surprise, because there are a lot of owners today that weren't in business in 1992. And a lot of other things have changed in terms of population and demographics. Also you assume that the station owner has to share in the ethnicity of his station, and we all know that's not true, since both CC and CBS own stations with Hispanic formats.

But since you feel your opinions are truer than my documented facts, I'll be glad to look at the facts you present to back up your opinions. And not just anecdotal accounts either.

 

[davideduardo]

2. There's more ethnic broadcasting in 2008, simply because there are more ethnic owners. More owners brought more diversity.

That's a laugh.

There is more ethnic broadcasting because the only America population growth is in the major ethnic groups, and not in non-Hispanic whites. So naturally, as one group grows, more stations will be attracted to serving it.

Let's take Hispanic targeted Spanish language stations:

While there may be more total stations, it's mostly because between 1985-90 and today, Hispanic population in the US doubled.

But he only places where there are lots of new owners is in very small Hispanic markets, like Birmingham, where failing AMs were taken over, often for debt assumption, and went to a Spanish language format... and in "dog" AMs in larger markets that went to Spanish evangelical formats. These are tiny players that succeed, if indeed they do, based on minimal investment, cheap operations and a niche market.

In Miami, the only US market where Hispanic household income exceeds that of non-Hispanic whites, there is no significant station, AM or FM, that is owned by local interests. We have SBS (founded in NY), Univision (founded in Harlingen) and Clear Channel (founded in San Antonio de Valero. And we have, via a proxy, Grupo Prisa from Spain, which owns twice as many stations as Clear Channel does.

In bigger markets, we have the same players in Spanish language as we had in 1995 before consolidation. SBS, Entravision (Entravision and Xcel), Univsion (which is a fusion of Heftel and Tichenor, so really one big player less), Border (and its incarnations), and the various post bankruptcy pieces of Amador Bustos' group, the in-Liquidation Luna group, etc. The Mega group sold out, and is gone.

In LA, in 1995 we had Villanueva, Liberman, SBS, Heftel, Entravision (via Luis Nogales who sold to them) and Lotus. Today the Villanueva station, after failing under two different Hispanic owners, is in English. The others remain; one new entry is a Mexican megacompany via the LMA of an Emmis station. No net change.

While Clear, CBS and others have entered the area of Spanish language formats, this is no different than the case of the gradual reduction of rock stations in many markets... a reaction to population changes and demographic shifts. And that does not change the number of broadcasters in major markets targeting this ethnic group. And that fact has created many new formats, not diversity of ownership.

 

[davideduardo]

Buffalo is different from the rest of the country. NYC is different from the rest of the country. LA is different from the rest of the country. Need I go on? Radio is inherently LOCAL, and should be programmed that way. Every market has its own quirks.

I've made a career of finding "you can't do that here because "here" is different" situations, doing it "here" and shooting to #1.

Local differences tend to be exaggerated by locals, perhaps out of self-preservation.

I'm reminded of my comment to the owner of a new FM in Karachi who wanted my advice: "But I don't know the the language, the culture or even the religion of the market." The owner replied, "But we know all of those. what you know is radio."

In fact, thinking back, everyone who told me "it won't work here" soon thereafter existed the industry.

 

[TheBigA]

The cap is there to prevent them from having any more stations, period.

The question remains, and I've asked it at least twice in this thread, how does this cap serve the public?

Because CC can't buy WOR, that station continues to languish as a geriatric talk station, with its airwaves for sale to those who pay. No one else wants to buy a stand-alone AM, and if they did, it would cost more to run than it would make. So how does this situation serve the public? In point of fact, a simulcast of the news format on FM would serve the public far better than what happened when CBS put KFWB in a trust. They could do the same with WINS, and its audience would be stuck with brokered talk. How does that serve the public?

As I've said, these are arbitrary caps, set in place a long time ago, and deserve another look. If someone better qualified came along during the license application procedure, the FCC would have the ability to choose the better applicant. That would serve the public. But the status quo does not. All it does it punish qualified owners, and give corporate haters reason to cheer. But it doesn't serve the public.

 

[Casey]

The cap is there to prevent them from having any more stations, period.

The question remains, and I've asked it at least twice in this thread, how does this cap serve the public?

Because CC can't buy WOR, that station continues to languish as a geriatric talk station, with its airwaves for sale to those who pay. No one else wants to buy a stand-alone AM, and if they did, it would cost more to run than it would make. So how does this situation serve the public? In point of fact, a simulcast of the news format on FM would serve the public far better than what happened when CBS put KFWB in a trust. They could do the same with WINS, and its audience would be stuck with brokered talk. How does that serve the public?

As I've said, these are arbitrary caps, set in place a long time ago, and deserve another look. If someone better qualified came along during the license application procedure, the FCC would have the ability to choose the better applicant. That would serve the public. But the status quo does not. All it does it punish qualified owners, and give corporate haters reason to cheer. But it doesn't serve the public.

WOR would arguably be in no better shape if Clear Channel owned the station. CC would probably have at most a couple local talk shows and have the rest be national shows, if they really wanted to buy the station at all. You have said yourself that CC hasn't bought a station in years. Why would they buy WOR? Simulcasts on FM from AM stations benefit no one. It reduces the amount of possible formats in a market by providing a duplicate of a station that is already available in the market. How does that help the public?

If Clear Channel has the max stations in a market and they feel the need for more, that is their problem. Same goes for any broadcaster, not just CC. There are a finite amount of stations in any market. The current rules are not restrictive enough as is. It is possible one of the major broadcasters could run a station better than the current owners. But that is purely a matter of opinion. I have seen Clear Channel run stations into the ground. I have seen local broadcasters run stations into the ground. It happens. However, it seems that the major broadcasters ruin a lot more stations than the locals do. Point is, we don't know who is or isn't qualified to run a station and changing the rules will not change that.

Take a small market such as Fort Dodge, Iowa. All 7 commercial stations that service the city and the nearby towns are owned by the same company, Three Eagles. Granted Three Eagles is decent company and their stations are pretty good, but how is that fair? Although annoying, the rules were put in place to help combat this. Clearly they are not restrictive enough. Three Eagles delivers good stations most of the time, but this is unfair. It is unfair to advertisers and the community. It is a complete monopoly. We don't need more cases like this. Eliminating caps/subcaps is not going to make this better. Three Eagles may be the most qualified broadcaster around, but even so this is still unfair to the public.

The caps were put in place to help prevent monopolies in small markets and duopolies in larger markets. Look at the satellite radio industry if you want to see what loose regulations can do. We have one large company with a complete monopoly. The result has been higher prices and less content. To put that into perspective for the broadcast industry, it would probably mean higher prices for the advertisers and less local content with more shallow playlists. Not ideal for the public.

 

[TheBigA]

If Clear Channel has the max stations in a market and they feel the need for more, that is their problem. Same goes for any broadcaster, not just CC.

That's one way of looking at it. But the reality is that there will be no saviors coming into radio to buy stations and hire local staff. What we have is what we have. These are the players. If you're a federal agency charged with overseeing a public resource, the goal is to get the most out of those companies. Not punishing them because they've reached some arbitrary number. That's what regulators do with the logging industry, the water industry, the mining industry, and other finite resources. So to say "that's your problem" isn't in the public interest. The way the rules were written, companies could take these caps to a judge, and they might be eliminated.

Three Eagles is decent company and their stations are pretty good, but how is that fair? Although annoying, the rules were put in place to help combat this. Clearly they are not restrictive enough.

Regardless, Three Eagles is willing to pay all the expenses of running the local office, transmitter, and towers, keeping the signals on the air 24/7, and available to the government if they need to alert the public for an emergency. That's the primary deal between a licensee and the government. The rest is in your head. There is no fairness other than the company keeps the signals on the air in case the government needs to use them. AFAIK, no station or company was ever fined because it didn't broadcast live & local programming, or because its playlist was too shallow.

The caps were put in place to help prevent monopolies in small markets and duopolies in larger markets.

That’s not true. There are other laws designed to combat monopolies, and those laws still apply to radio above and beyond any arbitrary caps. Any station purchases are subject to review by the FCC, the FTC, and the Justice Department. It’s Justice that addresses monopoly. In the Sirius XM merger, the precedent was set that satellite radio operates in a marketplace that includes lots of other competitors, including OTA radio. If that justifies the Sirius merger, then it means OTA operates in a marketplaces that includes all those same platforms. So just because one company owns all 7 commercial stations in one town because there are lots of other media sources available, including numerous non-commercial stations. The reality of the past four years is proof that easing the caps won’t lead to an increase in advertising rates, because of the competition from other media. The alternative is Fort Dodge gets its OTA radio from Des Moines. That’s not in the public interest.

 

[Casey]

If Clear Channel has the max stations in a market and they feel the need for more, that is their problem. Same goes for any broadcaster, not just CC.

That's one way of looking at it. But the reality is that there will be no saviors coming into radio to buy stations and hire local staff. What we have is what we have. These are the players. If you're a federal agency charged with overseeing a public resource, the goal is to get the most out of those companies. Not punishing them because they've reached some arbitrary number. That's what regulators do with the logging industry, the water industry, the mining industry, and other finite resources. So to say "that's your problem" isn't in the public interest. The way the rules were written, companies could take these caps to a judge, and they might be eliminated.

Maybe. But not really. Stations which are locally owned seem much more likely to higher local staff. In fact, KNEI dropped a syndicated country format a few years back in favor of hiring local staff to better suit the needs of their listeners and the community. How often does Clear Channel do this? Clear Channel recently launched a country station near here in a much larger market, but the only thing that is live is the morning show. Their DJ's appear to be voice tracked and cannot be called nor emailed. And this continues to be the trend. This doesn't benefit the community. So something tells me, you are wrong.

If it is that easy to get the caps eliminated, then why haven't they done so all this time? Probably because A, it isn't really a problem. Or B, that wouldn't actually work.

Three Eagles is decent company and their stations are pretty good, but how is that fair? Although annoying, the rules were put in place to help combat this. Clearly they are not restrictive enough.

Regardless, Three Eagles is willing to pay all the expenses of running the local office, transmitter, and towers, keeping the signals on the air 24/7, and available to the government if they need to alert the public for an emergency. That's the primary deal between a licensee and the government. The rest is in your head. There is no fairness other than the company keeps the signals on the air in case the government needs to use them. AFAIK, no station or company was ever fined because it didn't broadcast live & local programming, or because its playlist was too shallow.

I am pretty sure we were talking about what benefits the public, not what makes the FCC happy.

The caps were put in place to help prevent monopolies in small markets and duopolies in larger markets.

That’s not true. There are other laws designed to combat monopolies, and those laws still apply to radio above and beyond any arbitrary caps. Any station purchases are subject to review by the FCC, the FTC, and the Justice Department. It’s Justice that addresses monopoly. In the Sirius XM merger, the precedent was set that satellite radio operates in a marketplace that includes lots of other competitors, including OTA radio. If that justifies the Sirius merger, then it means OTA operates in a marketplaces that includes all those same platforms. So just because one company owns all 7 commercial stations in one town because there are lots of other media sources available, including numerous non-commercial stations. The reality of the past four years is proof that easing the caps won’t lead to an increase in advertising rates, because of the competition from other media. The alternative is Fort Dodge gets its OTA radio from Des Moines. That’s not in the public interest.

It is not true? Then what is the point of the caps? Behind every rule and law passed there is a reason. So if the caps are not in place to prevent marketplace domination, then what are they in place for?

Where was the proof gathered? Other than radio and possibly newspaper (assuming Fort Dodge has one) there really is not a single alternative that would be attractive. The internet has yet to deliver a viable way of delivering ads for local companies and tv primarily serves Des Moines. That would not be very attractive for an advertiser unless they wanted to reach the Des Moines market as well. Something not all local companies would want to spend money on. I don't know how advertising has changed since Three Eagles took complete control over Fort Dodge, but that isn't the point. The point is they do have a complete monopoly and complete monopolies never end well. Eliminating caps would allow for this to happen in larger markets, regardless of other regulations. Other regulations seem to be bypassed easily enough. Even the cap rules are passed easily enough if the city you are trying to serve has a nearby town.

 

[TheBigA]

Maybe. But not really. Stations which are locally owned seem much more likely to higher local staff.

In reality, I've looked at the ownership of hundreds of radio stations that have absolutely NO local DJs, and instead run 24/7 formats from Cumulus Media and Dial Global, and just about all of them are locally owned. Amazingly, Cumulus owned stations don't use Cumulus Media national formats. They're more likely to have some local staff than the locally owned stations.

But this is about FCC rules, and the FCC doesn't care about hiring local staff. All they care about is the transmitter is on. Voice-tracking is not prohibited by FCC rules, and so there is no relationship between a discussion about ownership caps and local staff.

If it is that easy to get the caps eliminated, then why haven't they done so all this time?

No one has said it’s easy. It’s a controversial and emotional issue. Every time a change in ownership rules is discussed (and that discussion is required by law), it becomes a huge political football, and a lot of people bring up factors, as you have, that are irrelevant to the issue. It’s also expensive and time-consuming to get federal rules changed. Look how long CBS has been fighting the indecency laws. After 7 years, it’s in the Supreme Court. But there’s no question that the same arbitrary factors involved in indecency rules also apply to ownership rules.

I am pretty sure we were talking about what benefits the public, not what makes the FCC happy.

It has to be both. This is not an issue that will be voted on by the general public. This is an issue that will be decided by the FCC. They have their ideas of what’s in the public interest, and if you spend any time studying government policy, it’s very different from matters of local staffing and playlists. The FCC spent several years doing local hearings on radio, all those issues were brought up, and nothing came of it. Those local hearings were a huge waste of time and money. Because staffing and playlists have nothing to do with the public interest as defined by the rules and regulations.

It is not true? Then what is the point of the caps? Behind every rule and law passed there is a reason. So if the caps are not in place to prevent marketplace domination, then what are they in place for?

You didn’t say “prevent marketplace domination.” You said “prevent monopolies.” Those are two different things. The caps were put in place over 15 years ago, when the marketplace was very different than it is now. As I pointed out, the Sirius-XM merger defined the media marketplace for this discussion, and will be the central factor if these caps are brought to the FCC. If the media marketplace involved more than traditional media, and the Justice Department says it does, then there’s no way owning one or two more radio stations will lead to market domination. Especially when there are other laws in place having to do with revenues and audience that would stay in place. If you read the rules, you will see that there are measures that prevent market domination beyond the ownership caps. But as I said, every application for license transfer must pass approval by the FCC, FTC, and Justice Department. So market domination and monopoly would be discussed on a case-by-case basis, not through some arbitrary number set 15 years ago.

Where was the proof gathered? Other than radio and possibly newspaper (assuming Fort Dodge has one) there really is not a single alternative that would be attractive.

This is not about Fort Dodge Iowa. This is about Top 50 markets. That’s the only place the big radio companies are looking to buy. The Top 50 markets are media meccas with thousands of advertising choices.

It’s interesting to note that in Fort Dodge Iowa, one of a small number of markets where the FCC has allowed all the stations to be owned by the same company, there is NO FORMAT DUPLICATION.

No one is asking for the caps to be eliminated completely. So you will not have one company owning all the stations in New York. This is simply about requiring AM stations not to be counted the same as FM stations against the cap. The cap would remain. But a company wouldn’t have to sell an AM in order to buy an FM, or vice versa. And if you’ve listened to AM radio lately, it could use a little help. The quality of AM radio hasn’t benefited by these ownership caps. The public hasn’t benefited by the majority of the programming on AM radio right now. If major owners sell their AMs, the programming won’t get better. Where’s my proof? Listen to AM now.

 

[TheBigA]

Other than radio and possibly newspaper (assuming Fort Dodge has one) there really is not a single alternative that would be attractive.

By the way, I've never been to Iowa in my life, so this isn't based on my experience. But I found out that there are actually 20 radio stations that can be received in Fort Dodge. So while Three Eagles may own the 7 biggest signals, there are alternatives in neighboring towns, including two NPR stations. I'm sure this came up during the FCC hearings on granting Three Eagles their licenses. Because market domination IS an issue, and it IS discussed on a case-by-case basis during the license application and renewal process. And Three Eagles HAS to prove that it's 7 stations serve the public. If they don't, anyone, including you, can challenge their renewal. My point is that there is recourse, and this is not about granting big corporations a blank check.

 

[SirRoxalot]

Heh. Right. Because it's so EASY to challenge an existing licensee under the current rules. BTW, can you name ANYBODY who's been successful?

 

[TheBigA]

Heh. Right. Because it's so EASY to challenge an existing licensee under the current rules. BTW, can you name ANYBODY who's been successful?

Can you name anybody who's tried?

Back when Clear Channel was amassing its stations, there wasn't a single challenge to their applications. Not one.

 

[ChiefOperator]

Hey BigA, you mean serve the public like KNDE did when its contest killed someone? Where was the FCC sanctions from that? Entercom was so irresponsible that it should have lost the station over that incident. But of course, little to nothing of significance was levied.

Ever had a candid conversation with an FCC field inspector? I have, the ones out of San Francisco specifically. And the honest ones will tell you that the FCC is the whore of the larger broadcast groups and that "public interest" is interpreted in the most general ways, so much so that it's almost impossible to challenge that a station isn't serving the public interest (under current rules).

It's almost impossible to mount a campaign to stop a license renewal. The larger broadcasters have too many resources and too much influence over the FCC. The larger broadcasters know this and spend quite a bit of their time lobbying for even more relaxed rules to make themselves even larger and more powerful.

 

[ChiefOperator]

(additional comments): One area we do agree, BigA, is that the existing caps are arbitrary. The genie left the bottle with deregulation of '96 and radio will forever be different. Allowing the existing groups to add a few more stations will do little additional harm to an already demolished landscape (although I certainly don't advocate increased ownership).

Before '96, there was competition and creativity amongst the different radio stations. Today, competition means competition among radio groups, not stations. Sad

 

[TheBigA]

Hey BigA, you mean serve the public like KNDE did when its contest killed someone? Where was the FCC sanctions from that? Entercom was so irresponsible that it should have lost the station over that incident. But of course, little to nothing of significance was levied.

You mean KDND in Sacramento? Which FCC rule was violated? The station was sued for wrongful death and had to pay the family $16 million. And all the people involved were fired. You call that "little to nothing of significance?"

Had Entercom been found at fault (and they weren't), that might have been just cause for the FCC to say they're unqualified to own a station, using the RKO precedent. But once again, someone needs to be willing to challenge. That's how our system works.

As I said in earlier in this thread, you should study how regulatory agencies that oversee other industries in similar limited resources operate. It's very similar. The goal of regulation isn't to be punitive, but to get the best deal for the public. That means a public-private partnership between the agencies and the industry. Some people want justice or punishment for broadcast companies, but that's not the purpose of regulatory agencies. The FCC could easily be a pain in the ass to the big owners. But that would mean they'd be stuck with a bunch of licenses that no one wants to buy. That's the issue in this AM/FM cap situation. Who will buy KDKA if CBS sells it? Some religious group or a guy who will run brokered programming. How is that good?

Before '96, there was competition and creativity amongst the different radio stations. Today, competition means competition among radio groups, not stations.

That’s not really true. The big groups were dominating the industry in the 1980s. There just were a lot more of them. All that started to change in the 70s, with the centralization of the big MSOs, as they were called at the time. Then in the 80s with Docket 80-90 and the growth of national program consultants, there was no such thing as competing against stations. By the early 90s, the MSOs had dominated the industry. The 96 Act didn’t change a thing. All it meant was that some MSOs could OWN lots of stations. But the tools were already in place for them to control the programming without owning them. But with all the heritage owners (like insurance companies, electronics companies, and other non broadcasters) getting out of the business, and newspapers prohibited from getting in, it was obvious there was a huge ownership vacuum. The MSOs offered to fill it, and that solved a big problem for the FCC and Congress. That problem still exists today.

 

[ChiefOperator]

Yes, I did mean KDND.

That's the point, isn't it? That is, the the FCC rules are such that these things can happen, yet the FCC can take no enforcement. If something like this can't prevent a renewal, then certainly a petition from some group or individual that the the station doesn't serve the public won't stop one. As far the civil award, that a completely different issue. That was brought on by a private party and handled in civil court. We're taking about FCC enforcement (nothing in this case), not the results of civil actions. The FCC did nothing and KDND would have suffered no hardship had the civil action been brought.

I guess that's okay with you? That the company could be so irresponsible that a jury finds it guilty of negligence, yet the FCC does nothing. You and I have two different views on the responsibility of the FCC.

The deregulation of '96 did significantly change the ownership landscape. That was one of the primary reasons for deregulation, to specifically increase the numer of stations a company could own (just ask the Mayes brothers who helped with the lobbying). While your correct that there were many large companies involved (Westinghouse, etc), their ownership was in no way as powerful as we see today. Even Bill Clinton has admitted that the '96 deregulation was shortsighted and more of a policy for the benefit of private investors than a policy that benefits the public.

As for your third paragraph, I'm not sure what point you're trying to make. But I can say this. One reason that it's difficult for local ownership is because a local owner would have to compete against the unlimited resources of these large companies. It would be difficult to do in this environment. Much easier to do if the ownership were spread among many owners, not just concentrated in the hands of a few.

 

[ChiefOperator]

(additional) Where exactly do you stand on the ownership issues? Do you think the public is better served (however you define that) by the current ownership caps or by strengthening the regs so that companies could own only a few stations? Where are you on this question?