If you think they wouldn't work on FM, why would they work on AM? It's not like AM is cheaper to operate. It's actually more expensive.
In answer to your question, you'd be surprised how many people still have POTS lines in their house. I have been cell-only for 10 years. Millions of people still use roof antennas for TV. Millions of people take trains to work. I can't understand why 19th century transportation still works today.
As a former telecom employee: POTS lines have a 99.999% reliability factor, not counting the out door plant (cables buried and on poles) which if a back hoe, flooded or drunk takes out a key cable will take down will affect ALL communications in a local area. I have never heard of a 911 center using VOIP as their main way to take calls from the public. It would be cheaper, (no tariffs) but Internet phone service has an extra piece of equipment (router) which is another thing to go wrong. If I was a terrorist, wanting to cripple western civilization, I would cripple the internet.
Cell service is limited bandwidth available in the cell you are in. I have been in "overcrowded" cells and not been even able to sent or receive texts without a five minute wait. There are a few cellular companies that had (have) microwave linking cell sites but the majority use T1 or T3 from the phone or cable companies so the reliability of the outdoor plant comes back into play.
I use an antenna (in attic because of neighborhood covenants) because I live 45 air miles from the nearest TV station and save about a $100 a month cable bill even after paying for paying for Hulu.
Trains are very fuel efficient. "Trains can move a ton of freight nearly 450 miles on a single gallon of fuel."
http://www.csx.com/index.cfm/about-csx/projects-and-partnerships/fuel-efficiency/.
"19th century transportation" is cheaper, often gets you home faster, and more is more fuel efficient. The Long Island Rail Road alone handles over 300,000 folks a day.
http://web.mta.info/lirr/about/GeneralInformation/
Assuming everybody carpools: 2 two a car, how much real-estate would be taken to build more highways and parking spaces for and extra 150,000 cars? And thats not even counting the NJ and Conn. folks.
More importantly you can have a drink or two after work ride the train and not get busted for DUI!
AM radio (especially below 1000 KHZ) not counting the sky-wave can cover more area than line of sight plus one third FM except for some areas with extremely bad soil conductivity. Especially in areas with Class B FM's (500 feet HAAT). The man made interference, limited band-with (not even 10 khz) and FCC allowing too many class D stations has killed it.