New York Press
November 17, 1999
This broadcasting battle should have been over before it began: the seeming mismatch pits the National Association of Broadcasters, known as one of DC's most influential lobbying groups, against a loose-knit group of underground radio boosters who couldn't find K St. on a map. The two camps are scuffling over the Federal Communications Commission's proposal earlier this year to create hundreds, perhaps thousands, of low power FM (LPFM) radio stations around the country. Broadcasters hate the idea. Basement radio geeks, convinced the airwaves belong to the masses, have been dreaming about it for years.
On paper, the NAB ought to be able to squash this quixotic, power-to-the-people issue like a bug. After all, three years ago NAB lobbyists, representing every major television and radio station owner in America, effortlessly shepherded through Congress the Telecommunications Act (Telcom), which ignited a radio gold rush that's still thriving today. Thanks mostly to the NAB's crafty work, it's been a long time since station owners were disappointed by broadcasting policy decisions made in DC.
Until now. With FCC Chairman Bill Kennard personally leading the charge for LPFM, and an expansive grassroots movement swelling behind it, the issue refuses to die. And with public comments on LPFM concluding this week, with an up-or-down vote from FCC commissioners coming as soon as early 2000, the NAB suddenly faces a small crisis of containment. How to stop, or least delay, the arrival of feel-good LPFM?
The proposal itself is a simple one: Let everyday citizens, led by church groups, elementary schools and music junkies, purchase inexpensive licenses for newly formed micro FM stations (powered by just 10, 100 or 1000 watts), and allow them to program for very small communities. The motive behind LPFM stations, which would reach maybe six blocks in a city and cover a six-mile radius in the country, is to bring more diversity to the airwaves in the wake of Telcom's massive consolidation, which not only eliminated many independent broadcasters, but pushed up station price tags into the seven-, eight- and even nine-figure range, effectively barring entry to most newcomers.
Low power is no cure-all. Even if the FCC adopts LPFM, existing congestion on the dial would make it all but impossible for any new signals to be added in major markets. And who knows, maybe the new mini-FMs, built on shoestring budgets and run by amateurs, could just be an underwhelming hodgepodge of eccentricities on the airwaves.
For broadcasters, none of that matters. Their goal is to snuff out LPFM before the first community signal signs on.
So far, that 10-month-old battle has been fought not on the airwaves, but in the filing room. Three months after the FCC in January proposed what it calls a rule change to consider implementing low power radio, the commission invited citizens to write in with comments. That's how the FCC makes its internal decisions; not with lengthy hearings or debates in Congress. Instead, arguments for and against are submitted in writing and read over by the commissioners and their staffs. Usually of interest only to broadcasters and a handful of DC communications attorneys, the comment period for low power radio, which has already been extended four times, has attracted nearly 3000 comments filed with the FCC. (By comparison, just a couple hundred were submitted during the FCC's recent comment period regarding loosening television ownership limits.)
The comment by Keith Allen-an adviser at Century High School outside Portland, OR, lobbying for LPFM for the school's weak student-run station-was just a paragraph long. Others, like the massive North Carolina Association of Broadcasters' document dump, numbered 463 pages. Sifting through them, it's clear the battle lines were drawn from day one; anyone who owns a station is against low power.
Critics, including several noncommercial broadcasters like NPR, which remains vehemently opposed to LPFM, argue low power stations would create dangerous technical interference for existing stations. Many are also adamant that low power is unnecessary, since radio already services every type of consumer.
Taken as a whole, however, the submitted comments should give any radio broadcaster pause. (To read them, go to https://gullfoss.fcc.gov/cgi-bin/ws.exe/prod/ecfs/comsrch.hts; enter 99-25 in the "proceeding" box and hit "Retrieve Document list.") What station owner wouldn't be concerned about the curious patchwork coalition of low power proponents, including the United States Catholic Conference; the Green Party; civil rights groups; Ralph Nader; university presidents; the Library Association of America; the cities of Detroit, Seattle, Ann Arbor, Santa Monica, Berkeley and Richmond; the United Church of Christ; Kurt Vonnegut; college professors; the Council of Calvin Christian Reformed Church; everyday listeners; Grammy-award winning artists; congressmen and senators; Native American tribes; and the ACLU, who have all explained to FCC commissioners that more voices are desperately needed on the dial?
It's doubtful, though, that many broadcasters have taken time to read the worrisome comments. Who wants to waste time fretting during a gold rush? As radio's best friend, Gavin magazine, recently asked in an article about the industry's never-ending profit expansion, "How tiring can good news get?"
And station owners will tell you it's been a long time coming. Ever since Walter Winchell's star began to fade nearly half a century ago, radio has operated as media's stepchild, quietly existing in the shadows of television, newspapers and magazines. Then Telcom virtually threw away ownership limitations and allowed companies to buy hundreds of outlets nationwide and streamline their operations at the same time, and now radio is strutting its way through a profit-and-loss renaissance that has Wall Street analysts swooning.
Ask CBS CEO and former radio station GM Mel Karmazin. He'd admit it's been the runaway earnings posted by CBS' radio division, not the tv network's ho-hum ratings, that have turned him into an all-star on The Street.
It used to be a rule that music-intensive stations only aired eight minutes of commercials each hour. Post-Telcom, that number has ballooned to 12 minutes, which adds up to 500 additional hours of ads each year.
What happened? As George Sosson, Clear Channel's senior vice president, boasted to The New York Observer, before Congress loosened ownership regulations station owners were nervous that impatient listeners would punch the dial and head to "the other guy" whenever lots of commercial clutter came today. "Now," said Sosson, "we all are the other guy." (GMs are also under extraordinary pressure to beef up their ad budgets now that parent companies answer to Wall Street.)
The feeding frenzy that Telcom unleashed on America's 10,000 commercial radio outlets has been startling. According to BIA Research, between 1996 and late 1999, 8500 stations valued at $74 billion have changed hands. An even more telling statistic reveals that just four years ago the top 50 owners, with a total of 876 radio stations, billed approximately 45 percent of the total 1995 estimated radio industry revenues.
Today, according to BIA, it requires just the top 10 owners, which account for 1784 stations, to bill almost 50 percent of the total 1998 estimated radio industry revenues. And how about those radio ad revenues? They've jumped nearly $5 billion, or 30 percent, since Telcom passed. Because it's now easier for advertisers to buy dozens, if not hundreds, of co-owned stations with just a few phones calls, radio's enjoying 10, 15 and, in some West Coast markets flooded with dot-com advertisers, even 20 percent ad growth over last year. For the month of August, radio ad sales nationwide were up 42 percent this year compared to August 1995.
In other words, Telcom, which the NAB spent millions of dollars lobbying for, has been more profitable than broadcasters could ever have dreamed. It turned mom-and-pop operators into millionaires many times over as conglomerates lined up to buy FM.
But now comes the consumer backlash-LPFM. The NAB, no doubt stunned that an FCC chairman would actually move forward with an initiative unpopular among major broadcasters, has been caught flatfooted.
"Of course they didn't see low power coming while writing the Telcom Act," says micro-radio activist Alan Freed. "They got what they wanted without thinking about the results, and never imagined the common person would ever rise up against them."
Maybe if virtually every major-market FM station in the country hadn't eliminated its news department (relying now on wire service copy and clipping the local newspaper), hadn't canceled its local community program (even if it did air at 7 a.m. on Sunday) and hadn't loaded up its spot breaks with record levels of commercials, the grassroots campaign wouldn't be so strong. But they did, and it is.
LPFM "is the single biggest issue to hit the radio industry in the last few decades," wrote NAB president (and Trent Lott's former college roommate) Eddie Fritts in a mailing to association members earlier this year, kicking off a campaign to derail the FCC initiative. The association's wild exaggeration about LPFM's importance telegraphed the association's posture-ready for a fight.
Gathering for its annual convention in Florida in September, the association's Radio Show at times morphed into an anti-low-power pep rally. Bonneville International's CEO and NAB board member Bruce Reese denounced LPFM as a "silly proceeding" and a "rotten idea."
But the battle for low power radio will ultimately be decided over the single issue of interference. If a majority of the five FCC commissioners think the new signals would compromise existing stations, low power will die. But if interference is deemed not to be a problem-and the FCC's Kennard earlier this year warned broadcasters not to "use interference concerns as a smokescreen"-hen the chairman should be able to push the initiative through.
While the NAB is spending generously to complete its own set of interference tests to boost its technical argument, broadcasters continue to grapple with LPFM's grassroots popularity. "Low power radio seems to have taken on a life of its own," claimed Radio Business Report early this year, perfectly capturing the mood among bewildered station owners and GMs. "Why?...there doesn't seem to be any reason for the LPFM frenzy."
The FCC's low power website has received 65,000 hits this year and nearly 3000 formal LPFM comments have been submitted in writing. Yet according to broadcasters, there's no reason for the LPFM frenzy.
"Radio's fooling themselves," says Robert Unmacht at the M Street Journal. "Detroit didn't think there was anything wrong with their cars in the early 70s." He notes the percentage of people using radio has dipped more than 10 percent in the last decade. "If McDonald's got a report that indicated fast food business was down just 1 percent they'd panic. Radio doesn't seem to notice."
Indeed, according to the NAB, the state of radio has never been more exciting. Included as part of the 19-page, anti-low-power radio kit sent out to members was a sample editorial the broadcasters were urged to submit to their local newspapers for publication. It boasted "there has never been more program diversity than in today [sic] fiercely competitive radio market." A representative from Franklin Broadcasting commented to the FCC: "Radio is already everywhere. The choice is unlimited, including a format for every walk of life and interest." And Radio Business Report chimed in with a popular defense among broadcasters, arguing that "consolidation has greatly increased program diversity. No longer is each market overrun with FM's butting heads to dominate AC, Country, or Rock. Instead, superduoply owners have broadened their score to include new offerings as [sic] Smooth Jazz, Urban AC, Hot Talk, AAA and even Christian country."
If broadcasters are so bent on diversity, why does CBS hang on to identical twin all-news stations in New York-WINS and WCBS-AM-which distinguish themselves only by the fact that WINS delivers its traffic updates on the ones and WCBS on the eights? Obviously it's because, combined, the two stations will bill approximately $80 million this year, according to Duncan's American Radio Report.
As for the notion that new formats have blossomed in the wake of consolidation, the numbers simply don't back it up. According to M Street Journal, over the last four years there has been virtually no increase in the number of commercial AAA, classical or smooth jazz stations. And there are still virtually no commercial folk, punk, blues, world music, opera, reggae or traditional jazz stations.
One of the few new formats to emerge in the last four years has been children's radio, and that's only because ABC/Walt Disney is aggressively pushing its own network, allowing remote broadcasters to sign up for Disney's satellite feed, flip a switch, fire the staff and become an automated outlet.
Trying to play down the consolidation that has transpired in recent years, the NAB boasts that "there are still more than 4,000 owners of radio stations in the U.S." The association doesn't bother to point out that that number is down an astounding 25 percent in just four years. More importantly, of the 10,000 commercial stations operating today, only about 1000-the top 10 stations in each of the top 100 markets-are really worth owning. How tightly have the Big Three-AM/FM, CBS and Clear Channel-sewn up that business? If the recently announced $23 billion, 830-station merger between Clear Channel and AM/FM were a done deal today, the newly formed company would enjoy roughly $3.3 billion in radio ad sales, CBS would come in second with $2 billion and at number three would be ABC/Disney, at roughly $380 million.
Meanwhile, broadcasters see all sorts of societal trouble ahead if LPFM becomes a reality. FCC comments from a group of New Mexico broadcasters expressed the fear that "militiamen, religious fanatics, drug culturists, alternative life stylists and various assorted crackpots..." would dominate the new LPFM service. In a written response, the Committee on Democratic Communications of the National Lawyers Guild noted, "What if they do? The last time we checked, the First Amendment belonged to everybody. It's called 'free speech.' (And which drug are they talking about-tobacco, alcohol, or viagra?)"
Another argument floated by broadcasters is that the Internet is the real answer to empowering people, not LPFM. "Given the congestion in the AM and FM bands, moreover, the benefits associated with the proposal may be better realized through other means of electronic communication, such as the Internet," wrote representatives for National Public Radio. "In addition to its attributes as a communications medium, the Internet also offers low barriers to participation, opportunities for personal advancement through life-long learning, and exposure to technological innovation." Someone might want to inform the folks at NPR that 190 million Americans currently don't have access to the Internet.
The main problem for broadcasters as they try to beat back community-focused LPFM is that in their recent rush to cash in, station owners have walked away from what used to be radio's strength: its localism. With the Howard Stern and Imus morning shows beamed from New York, the afternoon jock piped in from a sister station 80 miles away and overnight syndicated shows replacing the night jock, radio is no longer local, and it's certainly not focused on community service.
When recently asked about the ramifications of the mega-merger with AM/FM, Clear Channel president Randy Michaels told Billboard, "As local owners who tend to play their favorite music get forced out by people who are focused on shareholders' value and therefore understand we have to move customers' products, meaning we have to attract larger desirable audiences-we're intensely focused on serving the public."
That may be the best argument yet for low power radio.
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