The government has a place in assigning frequency and power. But other than that it needs to stand down and let the market work as markets will. The government saved AM with its fast response to AM stereo back in the 80s when too little too late made it ineffective.
The government did not respond rapidly with AM stereo. And when they made a decision, they allowed legal proceedings to delay adoption for 4 long years, by which time AM was pretty much dead for music.
The government opened up the 1600-1700 band to save AM.
That was not the purpose. The objective was to allow a few really bad AM facilities to improve a bit. It affected about 100 stations out of 5,000.
The government saved AM radio when it gave daytimers limited night time power. My favorite was the non defunct WINE 940 which had 1000 watts day and FOUR watts night.
This was allowed, IIRC, with the overall change from set 250-500-1000-5000-10000-50000 watt levels to "any power that fits" levels. That let stations that could not even get 250 watts at night to get something. Many did not use those extremely low power allocations.
Then they saved AM radio when they gave them translators which actually moved them off the AM band to FM where people still listen. This was helpful to an extent if we don't look at the flood of low power FM stations that now restrict the fringe area signals of full power licensed FM stations.
And the fringe areas were never "guaranteed" coverage areas, so what stations did not have was accidental, not a promise.
One might wonder why they won't allow the broadcasters with translators to turn off the AM signal and save the electricity costs.
Now, then! That is actually a good idea.
One reason broadcasters in whole are not making money is that there are too many pies and not enough advertisers to pay for all those pies. If AM dies, the good programming will find another outlet on FM or elsewhere. No one will miss AM if it is allowed to follow the logical course and die by the market place.
A lot of stations, particularly daytimers, high band AMs and FMs in really small towns should not have been licensed. And, for the most part, those are the stations that don't make money.
It already is a prophecy that is being fulfilled but not because of a lack of radios. People are turning away from AM because they can't hear it. The signals suck. Yes I know WBBM, WABC and several others can be heard with just a bit of background noise. Honestly though, tune around. The bulk of the signals are really bad. I used to listen to Len Berman on WOR. I live perhaps 60 miles from the Jersey swamp where the transmitter is located and I listened at home on the internet because the directional signal of WOR is unlistenable here.
Yet that station designed its pattern in the 30's to cover both NYC and Philly. It ran ads promoting that in all the trade magazines.
It was our legislators who did not want... back in the days of the FRC... anyone to have a station that could be a voice of a whole region of the country. So they capped power at a very low 50,000 watts. The one exception they made, WLW, was eventually forced back to 50,000 watts. The issue here is politics, not a deficiency of AM.
I know of a market of about 20 million where there are a dozen successful AM stations. All are 50 kw or higher, and get significant ratings. There, the government realized that restricting power was not a service to the public.
AM is going to die. Period. The government can take my and your tax dollars to subsidize it, but it will still die and I object to the government intervention. Nothing will be lost when the last 50,000 watt transmitter is turned off for the last time. All the good stuff will move on to FM or the internet and all the other stuff will be exactly where it should be. (sorry George Noory)
The issue is really the availability of new sources. But nothing is like AM for emergency broadcasts and coverage of remote areas. The number of stations will decline, but the end of AM is not immediate.
For starters, look at all the ethnic communities that depend on AM stations for information in their preferred language and music that is part of their culture.