NAB says it will make radio more "Local"

[TheBigA]

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.

I asked what FCC rule did they break. I'm still waiting for a response. The FCC isn't going to revoke a license for something outside its jurisdiction. It took them years and years to revoke the RKO licenses. It's not a kneejerk thing.

The deregulation of '96 did significantly change the ownership landscape.

The ownership landscape changed significantly in 1988 when RCA was bought by GE, and then got out of radio. That was part of the avalanche of station sales before 1996. Had things stayed the same, there would have been no need for 96.

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.

This has always been a problem in radio. Imagine being in Louisville in the 1960s and trying to compete against WHAS, owned by the Louisville Courier-Journal and the Binghams. What chance did another owner have in that town? None. Imagine being in NYC and trying to compete against WABC. WMCA and WINS tried, but neither made much of an inroad. I can go on and on. Competition is tough.

The fact is that we won’t be going back to the 1960s. All the heritage owners who built radio, for the most part, are gone. No new owners are willing to deal with the cost of running a radio station. The purchase price is no longer the impediment. You can buy a major market station for less than $25 million. Any local fast food owner has enough cash flow to make that kind of deal. But the operational cost is too high (especially compared to other businesses). So the ownership pool is pretty limited. That’s why I ask who will buy KDKA when CBS sells it. Because whoever it is, they won’t be running local programming because it’s too expensive.

(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?

That’s a great question and I appreciate you asking it. My opinion is it’s no longer about the quantity of owners, but rather the quality of owners. The reality is that there are too many stations to support the 7-7-7 rules, or even 22-22-22 rules of the past. The mistake the FCC made was to over-license the spectrum. That meant too many stations, driving down station shares, making spot prices too low. That’s what led to the heritage owners getting out of broadcasting in the 1980s. Insurance companies realized there were better investments than radio. So that led to specialized radio ownership companies like Clear Channel.

Right now, we’re in a situation where the AM dial is on life support, similar to where it was 20 years ago. Two things kept it afloat: The talk radio boom, and the 96 Act that required stations buying FM stations to also buy AMs. Those rules allowed those companies to start to sell those AM stations after a few years. In the meantime, the AM dial has degenerated to the point where the corporate AMs are the only bright spots on the dial. The rest is trash. Now, those companies are about to sell, leaving the entire band to become a ghetto. They’re willing to hold on to those AMs if they can buy one or two more FMs. The 96Act clearly states that the ownership caps and regulations MUST be reviewed and revised every four years for further deregulation. There has been no change to the radio ownership rules since 1996. They are asking for a small adjustment. This isn’t a big change. Proportionally, it’s due given the amount of time, and the amount of degradation to the AM band by local owners. Something needs to change, or the AM band will be completely dead. The FCC hasn’t done anything positive for AM radio in over 20 years. If they have a better idea, we’d all love to hear it. But right now, the situation is either allow the big owners with the best resources to keep their AMs and buy a couple more FMs, or watch AM radio die.

 

[TheBigA]

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.

That gets brought up a lot. Bill Clinton was a career politician. He made the decision to sign the 96 Act based on political expediency. It was one of the most popular bi-partisan pieces of legislation that was passed during his Presidency. His VP, Al Gore, was a prime proponant. Bill Clinton had never run a business in his life. He had no idea how to run a radio station, or about the economic circumstances that led to the Act. All he knew was if he veto'd it, there were enough votes to over-ride. So he signed it.

Our American system of broadcasting is based on private investment. Radio owners are asked to pay for the operation of radio stations, so that those frequencies are available if there is a national emergency. That's the deal. Otherwise, those are private businesses, and always have been. In 1967, the Congress created the Public Broadcasting Act that allowed for taxpayer money to be dedicated to an alternative system of broadcasting. It was called "public broadcasting" to differentiate it from the private system that existed. That's the choice we have. Now, a group of politicians are campaigning to remove taxpayer funding from public broadcasting, leaving private broadcasting as this country's only system. How does that benefit the public?

 

[Goat Rodeo Cowboy]

Our American system of broadcasting is based on private investment. Radio owners are asked to pay for the operation of radio stations, so that those frequencies are available if there is a national emergency. That's the deal.

Interesting way to put it! But are you saying that NATIONAL EMERGENCY is the only justification? What about a localized emergency? If there is something going on only in my area.... like a tornado leveling a small town in the area... the the Faustian bargain between the broadcaster and government does or does not require that the broadcaster make services available for the localized need?

At first thought a lot of broadcasters might embrace your definition of "the deal"... until they realize that it is not limited to simply breaking into programming long enough to offer some kind of contribution to "the national emergency".... it mean's being PREPARED to survive the emergency and be there with whatever facilities are needed to meet the emergency communications needs. That may mean a hardened facility. That may mean having actual people... you know, the kind who breathe, and need a place to potty while engaged in meeting the emergency need... and access to food and water.

 

[SirRoxalot]

Wow. PAGES of diatribe that display an "interesting" point of view." Where to start...

No new owners are willing to deal with the cost of running a radio station. The purchase price is no longer the impediment. But the operational cost is too high (especially compared to other businesses).

Hmmm. Last I looked the profit margin for radio averaged about 35%. Tell WalMart, who's profit margin is less than 5% that the "operational cost is too high". What's too high is the leverage of companies that overpayed for radio stations between 1990 and 2008. That's just poor management, which is not the fault of the industry.

My opinion is it’s no longer about the quantity of owners, but rather the quality of owners. The reality is that there are too many stations to support the 7-7-7 rules, or even 22-22-22 rules of the past. The mistake the FCC made was to over-license the spectrum. That meant too many stations, driving down station shares, making spot prices too low. That’s what led to the heritage owners getting out of broadcasting in the 1980s. Insurance companies realized there were better investments than radio. So that led to specialized radio ownership companies like Clear Channel.

Insurance companies and smaller owners got out of radio because "specialized radio ownership companies like Clear Channel" were throwing so much money at them that they couldn't resist taking the cash. They could make more by taking the money offered and putting it in a safe investment - like bonds - than they could by running a radio station. Clear Channel and others were going to "revolutionize the industry" by creating "synergies" - IOW cutting costs dramatically by hubbing, voice-tracking, and bestowing the "blessings" of big-market radio on those poor rubes in the smaller markets.

What Clear Channel and others didn't get is that radio is predominantly LOCAL. People weren't as excited about a disembodied voice from nowhere inserted into a nation playlist as CC thought that they would be. Their idea of "quality" got beaten by "relatability" too often. The second part of the equation - dominating a market and driving up rate - simply reduced the number of advertisers who could afford to buy the medium. And, this pesky thing called the Internet started to offer extremely targeted audiences at VERY affordable rates. The "specialized radio ownership companies like Clear Channel" didn't get the virtual advertising monopoly that they sought in specific demographics. When some major advertising sectors - like automotive - got in trouble, they took a pounding. Their advertising base was so restricted that they didn't have the capability to fill those avails dumped by big players because they'd squandered the advertising relationship that they'd once had with smaller players. To top it off, they "cut sales expense" by cutting commissions, losing great radio sales people to other industries. Anybody remember Farid's "we don't need sales people. We just need order-takers"? Yeah, radio will sell itself.

The rest of the notion that AM radio will die if we don't give it to Clear Channel, Cumulus, and their ilk is as foolish and short-sighted as much of corporate radio management.

The bottom line is this. The American people are uncomfortable with the idea that so few major corporations are controlling the mass media. The FCC is well aware of this. Giving more control to a few major operators is NOT in the best interests of the listeners. If AM is going to turn into a "ghetto", and die, then let it die. My guess is that somebody will pick up those licenses. If not, they'll go dark, and free up spectrum for the people still operating. Voila, a fix for the "overlicensing" since the '80s. Meanwhile, no new FMs for the guys who already - in my opinion - control way too much of the electromagnetic spectrum already. And no bail out for the consolidators who created this mess in the first place.

 

[TheBigA]

Interesting way to put it! But are you saying that NATIONAL EMERGENCY is the only justification? What about a localized emergency?

The subject is about the role of a national agency. But the responsibility for local emergency, according to the Department of Homeland Security and the FCC, is the local emergency officials. They must contact the radio station using systems set in place in advance.

 

[TheBigA]

What's too high is the leverage of companies that overpayed for radio stations between 1990 and 2008. That's just poor management, which is not the fault of the industry.

You’re asking the wrong question. My point has nothing to do with current managers. It’s why, at a time when station prices are at a 30 year low, we’re not seeing a lot of new owners bringing great ideas and programming into the industry. As I said, the price for stations isn’t what scares them. It’s the operating cost. That’s why when a local owner buys a station, he does the cheapest thing possible. It’s the new owners, not the big radio companies, who are responsible for the worst programming on radio.

One notable exception is Randy Michaels, whose Merlin Media company has purchased several major market FMs and is running all local news. Unfortunately, even with his devotion to local programming, his stations have failed to attract an audience.

Insurance companies and smaller owners got out of radio because "specialized radio ownership companies like Clear Channel" were throwing so much money at them that they couldn't resist taking the cash.

That’s not true. The exodus by heritage owners from broadcasting began more than ten years before deregulation. In the 1980s, all the major groups, like ABC, NBC, and CBS, went through ownership change. That had nothing to do with anyone “overpaying.” Plus the FCC forced newspapers out of broadcasting, and over-licensed the spectrum, driving down station shares and spot prices. Two terrible decisions that happened long before deregulation.

What Clear Channel and others didn't get is that radio is predominantly LOCAL.

You don’t live in a market where Clear Channel owns radio stations. The fact is that Clear Channel stations are still mostly local. They have local management and local programmers making decisions about local operations. CC has never been a top down company, with national formats originating from a central studio are forced on local stations. And if you look at the ratings in markets where Clear Channel owns stations, like NYC, LA, and Dallas, they own multiple stations at the top of the ratings list. So Clear Channel is not the boogie man everyone thought it would be.

The rest of the notion that AM radio will die if we don't give it to Clear Channel, Cumulus, and their ilk is as foolish and short-sighted as much of corporate radio management.

AM radio is dead now. The ONLY bright lights on the AM dial are the few stations owned by the big radio companies. Even in Buffalo. Who will buy WBEN or WGR if Entercom is forced to sell? Some local businessman? Do you think he’ll have the same level of success with those stations if all the programming moves to FM? Take a look around. How much success has WECK had in the last few years? And it’s not about the quality of the signal. So don’t blame bad signals for bad programming.

This proposal is like a major grocery chain saying they're willing to open a store in a crime-ridden ghetto. They could simply walk away, as so many companies in other industries have done, and leave the empty and abandoned hulks of yesterday for crack houses. Would any city in this country be willing to compromise with a business in order to revive a neighborhood? Of course, and they do it every day. Why wouldn't the FCC be willing to do the same thing with AM radio?

The American people are uncomfortable with the idea that so few major corporations are controlling the mass media.

In theory, sure. But in practice, when the American people make media decisions, by and large they choose the major corporations. Why? Because the big corporations know what they want. We have this mythology of small local businesses, and yet we as a people have destroyed those businesses by shopping at national stores and eating at national restaurants. No one forces people to go to Wal Mart instead of the local store. But that’s what people do. So when local radio stations look for local advertisers, most are gone. That process began before radio deregulation. You can’t talk about changes in radio without talking about changes in sociology, changes in local business, and changes in the media marketplace. When you look at the bigger picture, the future of democracy is not in jeopardy because of the ownership of a couple AM radio stations. There are far bigger issues to deal with.

If AM is going to turn into a "ghetto", and die, then let it die.

The FCC’s job is to manage a scarce public resource, not preside over its demise because of some out-dated principle. These caps have not been changed since 1996. In the years before deregulation, the ownership caps were loosened at least three times. Where was the outcry then? We’re not talking about eliminating caps. Companies will still be restricted to the 1996 total numbers. Just the sub-caps would be removed. Not a big deal, and there really are only a few places where this will come into play.

And no bail out for the consolidators who created this mess in the first place.

No one’s asking for a bail out. And the FCC is who created this mess with over 40 years of terrible regulation, starting with the newspaper cross ownership ban in the 70s, followed by Docket 80-90 in the 80s.

Had local owners done a better job of running AM stations, you’d be right. But in market after market, when AM stations are sold to local owners, they turn stations that has once been popular destinations into stations with religious, ethnic, or brokered programming that appeal to smaller and smaller audiences. This isn’t about replacing those stations. It’s about retaining the few remaining popular AM stations. Even with the caps, listeners are disappearing from AM in huge numbers, and it’s becoming harder to find receivers with AM on them. Keeping the caps because you hate big radio won’t prevent the downward spiral from continuing. It’s not in the public interest, and the FCC should do its job and protect what was once a valuable public resource.

 

[SirRoxalot]

AM in its current state is mostly a creation of big radio companies. They're the ones who asked for the 5KHz mask, and IBOC, and "competition" among AM stereo technologies, and a host of other bad technology decisions that have reduced AM to a shadow of what it once was. The FCC is VERY influenced by Big Broadcasting money, so you can't exactly put all them blame on a politically-influenced commission at the mercy of whatever party is in power.

If, as you assert, AM is dead, then the FCC can simply turn it into digital bandwidth for wireless access to the Internet. I'm sure that the telecom people would love to have it for short-range, low-powered cellular access. Or, it could be used for lower-data-rate services like texting and voice. BTW, I'm not advocating this. I believe that Big Broadcasting is actually pursuing converting the broadcast band into digital bandwidth because it would reduce their costs for towers & transmitters.

Clear Channel, to their credit, realized that their initial model didn't work. They've stumbled forward with a hybrid of their original plan, supplemented by local content. BTW, local content is restricted mostly to drive time. How many stations from the major consolidators have much live content outside drive time? Even major markets are tracked or syndicated in mid-days - often the daypart with the highest number of listeners. Forget about live voices after 7PM - even in the majors.

We're not seeing new owners getting into radio for a simple reason. THERE'S NO MONEY. The banks are NOT looking at radio as a good investment going forward. Predictions are for 3% growth. Are YOU satisfied with a 3% return on your money? The banks don't care about the profit margin in radio because they're interested in the worst-case scenario - if this guy goes bust, what's the station worth? Right now, with all the buzz about Internet broadcasting (the latest boogie man now that satellite is STILL unprofitable), nobody is confident that radio as an industry will continue to be profitable. There are too many other places to invest that promise a greater return.

The consolidators created a radio bubble. That bubble has deflated with a long fart. Clear Channel is saddled with huge debt. Cumulus & Townsquare are owned by banks after bankruptcy. CBS, Entercom and a few others didn't get as deep into the expansion, and are have manageable debt. If there's an opportunity, they're buyers - but it's got to be a great opportunity because money is tight. BTW, radio's not the only industry where money is tight. Radio in a lot of ways reflects the real estate market in that the same kind of bubble was created, and has burst. There are a lot of people out there who are under water on their property - just as Citadel, Town Square, Cumulus, and others either are or were before bankruptcy. The banks are sitting on their money because that issue hasn't been resolved, and it's not going to look good on the balance sheets when they do either foreclose or drop the value of loans.

 

[Goat Rodeo Cowboy]

Interesting way to put it! But are you saying that NATIONAL EMERGENCY is the only justification? What about a localized emergency?

The subject is about the role of a national agency. But the responsibility for local emergency, according to the Department of Homeland Security and the FCC, is the local emergency officials. They must contact the radio station using systems set in place in advance.

Whoa! Wait a minute. I not arguing with you, I'm asking you to flesh out, to define what you said. And I think part of your message that I have picked up is that the deal between the government and the broadcasters has been modified during the years. The deal is 2004 for example is different that the deal in 1934.

Our American system of broadcasting is based on private investment. Radio owners are asked to pay for the operation of radio stations, so that those frequencies are available if there is a national emergency.

I'm an old timer... and the OLDER old timers who taught me and mentored me had me to understand that the deal was that the broadcaster was to serve his/her community.... not just in emergency, but in every day service. Deliver the news. Help local civic organizations grow strong and deliver their services to the community. Educate the populace of the community. (We can look back and see that the population of the late 20s and early 30s needed a lot of assistance.... not so much in the 3 R's, but in just understanding community in the evolving age.) Service in time of emergencies was also expected with the FCC authorizing daytime only stations to stay on at night if that would assist in the recovery. I don't know that anyone ever gave much consideration to the idea that broadcasters owed that level of service only to the Feds, or only to the States, or only to the Locals. We did it for ALL!

What I'm asking your clarification on is two fold.

1. Are you saying because of the 1996 legislation and other changes that now broadcasters are relieved of duties to provide services to their listening area other than in times of emergency? Are you saying that the granting of a broadcast license no longer requires any level of something that could be called "a public service" during those days and hours when no one has declared an emergency of some kind?

2. Are you saying that now broadcasters are relieved of duties to provide emergency services to their listening area if the emergency is not a FEDERAL emergency? If Harrisburg, IL gets blown away, or if Ringgold, GA, Marysville, IN or Greensburg KS are flattened and the mayor or sheriff calls the nearest surviving radio station as says: I need your help in getting word to the citizens, the licensee is free to say: "Screw you. I've got records to play. Turning off the automation and getting a person in there is a cost to me. Call me back when it becomes a Federal Emergency. Only then do I have any responsibility to serve."

I hope that is not where we have arrived in the 21st Century.

 

[radioray]

"It’s why, at a time when station prices are at a 30 year low, we’re not seeing a lot of new owners bringing great ideas and programming into the industry."

Station prices are not at a thirty year low. Stop misleading people.

 

[TheBigA]

AM in its current state is mostly a creation of big radio companies.

Absolutely wrong. The big radio companies own a fraction of the AM frequencies. And the FCC can do what it wants. It reports to Congress, not radio companies. It doesn't have to approve anything, and has refused a number of changes requested by the big radio companies, including numerous previous requests to loosen ownership caps. Plus at the same time, they've approved numerous rules and changes opposed by the big radio companies. So you're wrong.

If, as you assert, AM is dead, then the FCC can simply turn it into digital bandwidth for wireless access to the Internet.

This idea has been floated here a number of time, and the conclusion from the engineers is it’s not practical. Plus its contrary to the goals and purposes of the FCC, which currently has no authorized role in the internet. There really is no other practical use for the AM band than the one that’s been approved. So it’s in the best interest of the FCC and the public to make it the best it can be.

We're not seeing new owners getting into radio for a simple reason. THERE'S NO MONEY.

In your previous post, you said there was a 35% profit margin. Now you say there’s no money. Which is it?

I’ve been saying all along that the cost of operating a radio station with local staff, studios, and transmitters is too high for new players. Now you agree. Thank you.

This is why it’s in the best interest of the FCC and the American public to retain the little bit of quality content still available on AM by removing the AM/FM subcaps.

 

[TheBigA]

The deal is 2004 for example is different that the deal in 1934.

Absolutely. The TCA of 1996 superceded the 1934 Act. And the creation of the Department of Homeland Security in 2002 made it directly responsible for all national emergencies.

Are you saying because of the 1996 legislation and other changes that now broadcasters are relieved of duties to provide services to their listening area other than in times of emergency? Are you saying that the granting of a broadcast license no longer requires any level of something that could be called "a public service" during those days and hours when no one has declared an emergency of some kind?

No. I'm saying the responsibility for emergency service was removed from broadcasters by various civil defense laws dating back to the 1960s. Broadcasters are not expected to initiate emergency service without authorization from designated government officials. As I said, the 2002 Homeland Security Act is the source for responsibility. Regardless of if it's a federal or local emergency, the responsibility rests outside the local broadcaster. However, broadcasters must keep their signals on, and must make their facilities available to designated emergency officials if and when they ask for access.

The best way to understand this is to go back to the national EAS test a few months ago. What was supposed to happen during that test is local programming was pre-empted and interrupted by the national test. The national emergency service takes control of the station signals and programs them from a central place. Local broadcasters are not expected to provide the staffing for emergency service. The airwaves are turned over to authorized emergency personnel.

 

[TheBigA]

Station prices are not at a thirty year low. Stop misleading people.

At one time, stations were trading at ten times cash flow. The average price now is four times cash flow. When was the last time that happened?

 

[TheBigA]

AM in its current state is mostly a creation of big radio companies. They're the ones who asked for the 5KHz mask, and IBOC, and "competition" among AM stereo technologies, and a host of other bad technology decisions that have reduced AM to a shadow of what it once was.

The big radio owners were opposed to (1) elimination of the clear channels, in an attempt to cram more stations into the band; (2) shinking of spacing between frequencies, once again to cram in more frequencies; and (3) the limiting of audio bandwidth. I'd suggest those three things are far more destructive than the ones you mention.

 

[SirRoxalot]

AM in its current state is mostly a creation of big radio companies.

Absolutely wrong. The big radio companies own a fraction of the AM frequencies. And the FCC can do what it wants. It reports to Congress, not radio companies.

And who does Congress report to? DONORS. With deep pockets. Like broadcasting companies. Let's not be naive.

If, as you assert, AM is dead, then the FCC can simply turn it into digital bandwidth for wireless access to the Internet.

This idea has been floated here a number of time, and the conclusion from the engineers is it’s not practical.

550KC through 1700KC isn't practical for transmission of low rate data & voice? That's news to a LOT of engineers. With spread-spectrum technology and a multitude of low-power cells, you certainly could use it for a number of wireless applications. The only reason it's not practical now is that there would be too much interference on the band from existing stations.

We're not seeing new owners getting into radio for a simple reason. THERE'S NO MONEY.

In your previous post, you said there was a 35% profit margin. Now you say there’s no money. Which is it?

I’ve been saying all along that the cost of operating a radio station with local staff, studios, and transmitters is too high for new players. Now you agree. Thank you.

Sheesh. Maybe you should read the ENTIRE POST before you respond. I already answered this question. Would you like me to repost the paragraph that answers it? OK.

We're not seeing new owners getting into radio for a simple reason. THERE'S NO MONEY. The banks are NOT looking at radio as a good investment going forward. Predictions are for 3% growth. Are YOU satisfied with a 3% return on your money? The banks don't care about the profit margin in radio because they're interested in the worst-case scenario - if this guy goes bust, what's the station worth? Right now, with all the buzz about Internet broadcasting (the latest boogie man now that satellite is STILL unprofitable), nobody is confident that radio as an industry will continue to be profitable. There are too many other places to invest that promise a greater return.

This is why it’s in the best interest of the FCC and the American public to retain the little bit of quality content still available on AM by removing the AM/FM subcaps.

Actually, it's in the best interest of the FCC and the American public to retain the little bit of ownership diversity still available on ANY radio band.

 

[TheBigA]

And who does Congress report to? DONORS. With deep pockets. Like broadcasting companies. Let's not be naive.

The fact is the amount of money broadcasters donate is a fraction of what other lobbying groups spend. The RIAA spends ten times as much as the NAB. The telecom lobby spends more than fifty times what the NAB spends. Broadcasters don't have the clout with Congress they once had. Which is why so many of their priorities are overlooked.

Actually, it's in the best interest of the FCC and the American public to retain the little bit of ownership diversity still available on ANY radio band.

Diversity means nothing if no one listens. Right now, the only AM stations with audience are the ones owned by the major companies. Once those companies sell those stations, there will be no reason for anyone to listen to AM. That is not in the best interest of the FCC or the American people. Allowing those stations to remain, and not count against the ownership cap, will not tip the balance of democracy. It's a very small compromise made by an agency that's done nothing to help AM radio.

The only reason the FCC wouldn't approve this request is it simply doesn't care about broadcast radio any more.

 

[ChiefOperator]

First, radio stations in 1996 were not in the financial mess that you talk about. Most of the locally owned station were doing fine financially and had little to no debt. Stop saying that the stations were struggling and that they were saved by the deregulation of '96. It simply isn't true.

The stations were mostly sold after ‘96 for one of two reasons. First, the owners were offered a fortune for their license by the CCs and others. Second, the local stand-alone could no longer compete in the changing landscape where there was no longer a level playing field.

Stop saying that the purpose of '96 was to save the spectrum. It wasn't. '96 was never about the public. No, it was about a group of investors who saw an opportunity to better their investment. They lobbied Washington and they won. It wasn't about saving the spectrum, helping the community or any of the other BS that was told. It was about private investment. Period.

As said earlier, the country is better off when media ownership is spread among local owners, not concentrated in the hands of a few. You continue to talk about all the problems that will happen if large radio groups are eliminated. Well I’m calling your bluff. Let it happen.

Bring back very strong caps, eliminate the large groups, and let the fall-out happen. What would be the result? Will the dial go dead? No, not at all. Instead, station prices will fall until they reach a price where local business folks, not just corporations, will be able to purchase. We’ll see true competition and stations will compete against each other once again. Those stations that can’t make it will go dark and the spectrum will police itself.

Your argument that radio needs the large companies is as misinformed as the past arguments in my town. We have a “formula business” ban in my town; specifically, the ban prohibits chain stores (mostly restaurants) from opening in town. When that policy was proposed, we heard the same old, tired arguments: eliminate the big money chains and we’ll never have another business open in our town. The town will be bankrupt, schools will close.....blah, blah, blah.

Well the ban happened in 2005 and our community had an explosion of creativity. All the nay-sayers look like fools. The community THRIVES. We now have unique local businesses and a vibrant community. Our community is not “McDonaldized" like so many of the other communities. And we now have many spin-off businesses. Our local businesses need local craftsman, local attorneys, local tax folks, and other local services. These services are handled locally now, not sent to corporate headquarters as they once were and like so many other communities still do.

Why do you fear true competition in radio? I mean competition is what everyone says they want, isn’t it? (no, I don’t consider oligopolies a true competition structure). Why not place stronger caps on radio and let the many control the stations, rather than just the large radio groups. Let the “market” work. If it’s going to fail, then let it fail. That’s the way it works. Sorry, the bottom line truly is that the country is better off when media is NOT concentrated in the hands of a few.

Enjoyed the debate, but this will probably be my last post on this thread--it’s making me dizzy .

 

[borderblaster]

Some of us have worked for companies owned by billionaires, some of us have worked for companies that paid minimum wage and all the car wash coupons you could eat. Some of us have worked for both.

Who actually is going to buy all of these stations that you want forced to be sold? Progressive insurance? Think they want to buy 7 stations in 7 different markets? How many mom and pop operators are going to "buy themselves a job"? Do you think we're really not going to have the most popular formats on the air in favor of one guy's personal jukebox? Let's say you have 5 stations in a market of 25000. How much service, and how many local DJ positions are really going to be created? If spot rates drop to a dollar a holler, 4 of them will go dark. That was a big problem when all the 80-90s came on in the first place; a station that did good community service no longer could with several competitors driving spot rates down.

There is no scenario which brings 1975 back. None.

 

[TheBigA]

First, radio stations in 1996 were not in the financial mess that you talk about.

If you don’t believe me, just read the Broadcasting Magazine archive from 1992, detailing the financial state of the industry as a result of Docket 80-90. David Eduardo will be glad to quote the specifics.

Stop saying that the purpose of '96 was to save the spectrum. It wasn't.

In a way, you’re right. The driving force behind the 96 Act came from the big telecom companies. They were the ones who spent the most lobbying money, and they were the ones who benefited the most. The broadcasting changes in the 96 act were minor. The radio ownership changes reflected the ongoing correction after Docket 80-90. There is no question that the FCC over-licensed the spectrum, and the increase in the number of stations resulted in a geometric drop in station shares.

Bring back very strong caps, eliminate the large groups, and let the fall-out happen.

This is not the kind of thing that the public votes on. The airwaves are a public resource, managed by the government, like mineral rights, water rights, lumber, gas, and oil drilling. You’re welcome to your opinion, but it really doesn’t matter. The government will manage those resources the way it sees fit. The current caps have survived tjree Presidents from both political parties. We won't be going back to pre-96 caps again.

Why do you fear true competition in radio?

Huh? You’re the one advocating banning chain stores. That’s based on the fear of true competition. When true competition takes place, the marketplace decides which businesses succeed. The public makes buying decisions based on price, and chain stores deliver the best price. If you take price out of the equation, the public is forced to pay more. True competition would allow companies to own an unlimited number of radio stations. Ownership caps are an attempt to control the marketplace. They are contrary to free enterprise, which is why ownership caps don’t exist in most other businesses.

 

[ChiefOperator]

When the prices drop, people who want to practice "radio" will buy the stations. The advertising dollars that are sent to one cluster will now be spread among various owners. Yes, there will be additional emplyment because consolidation of services will no longer be as easy as it is now.

You're right that one who does better community service will run into problems because of competition of rates. Howver, that problem already exists today, so much so that few stations do it. Radio on a local level would place much more pressure on ALL stations to better serve the community.

But again, does this country believe in real competition or not? If so, then let's compete. Open up ownership, take it out of the hands of the few, and let the stations compete against each other.

 

[TheBigA]

When the prices drop, people who want to practice "radio" will buy the stations.

Station prices dropped in 2008. I've said this numerous times throughout this thread. You can buy a radio station in NYC for $25 million. Five years ago, the going price was $250 million. Meanwhile ad rates have been dropping steadily, and costs have gone up.

You want real competition? Don't force artificial ownership restrictions. The American way is leave it to the marketplace. Not the government.