Localism In Radio May Return (Op-Ed)

by William C. Walker
WILW Radio


March 19, 2008

Background:

This past week we finally learned what the FCC's countrywide conferences on Broadcast Localism were all about. According to a story written by Randy J. Stine of Radio World in the March 12, 2008 edition several new regulations are being proposed by the FCC that will likely have a major impact on most radio broadcast outlets in this country. The question is whether or not these proposed changes in regulations will result in better radio or simply NO radio.

The FCC is recommending the following changes be made in order to facilitate live and/local broadcasting in our cities in towns:

1) Stations must establish advisory boards
2) Mandatory public service programming
3) Stations must be manned 24/7
4) Studios must be located in the COL (City of License)

My Perspective:

First and foremost my allegiances lay with community radio as a whole and promoting live and/or local programming whether it be on a licensed radio station or Part 15 unlicensed radio station. That being said,in a moment I am going to give my view on how these rules, if implemented, will likely impact the Part 15 AM broadcaster.

One thing is painfully clear and that is a significant number of licensed broadcasters will likely darken stations in many markets around the country because it will be virtually impossible in this day and age to fully comply with these new regulations whether it be in whole or in part, and just break even, let alone turn a profit. Ad revenue is declining, station ratings in many markets are declining and increased competition for iPod's, internet radio and satellite radio all serve to take a slice of the pie from ordinary terrestrial radio. And infringement upon First Amendment Rights also must be considered if these rule changes take effect!

Many stations have moved their studios out of their COL to a larger city or town nearby where they can tap into larger revenue streams. Sadly, it is a fact of life these days that the bottom line seems to be more important to corporate broadcasters than serving their COL. It is very likely that many of these stations will go dark instead of returning to providing programming to their COL because their corporate owners will deem it impossible to make a profit under such conditions. In a few cases though these rules may actually help to return some local programming to the radio dial in rim shot communities that are large enough to still support a licensed station. In cases where these rim shot cities have had multiple licensed stations move studios to a larger city it is likely at least one or more of the stations that calls that city their COL will likely go dark. Still others may find a way to provide local programming to their COL yet not have to turn their back completely on their current audience in the metro area they now serve. One thing is certain, even if only a slimmed down version of these proposed regulations are passed, the landscape of the radio dial will be changing dramatically in the years ahead.

Now how will these rule changes impact the Part 15 AM broadcaster? Clearly it will be a mixed bag and in some cases these rule changes can benefit some Part 15 broadcasters but in other cases it will become a hindrance or even an obstacle to staying on the air. First, the obstacles will be addressed.

Clearly in some cases, cities and towns that currently have a station with a COL to their name will benefit especially if the city is large enough to support at least one local radio station. The following is a prime example of the current state of local radio in many small cities around the country:

A city (Anytown USA) with a population of 50,000 people is located 35 miles from a metro area of 2 million people. Anytown USA has one 1 kw AM, 1 Class A FM (translator for another station in the nearby metro area) and 1 Class B FM (originates its own programming) licensed to the city but the studios of the FM outlets are located in the metro area and provide programming for the metro area while the AM outlet is owned by a corporate owner with consolidated offices in the metro area for several regional stations. Programming on the AM station is Talk off the Satellite with no live or local programming of any sort for its COL (Anytown USA). In this situation, it is currently possible for a professional commercial or non commercial Part 15 AM radio station to find a niche and effectively serve Anytown USA with a live and/or local format because the licensed stations don't provide ANY local programming for the Anytown USA market.

After the rules changes? It is likely the AM will go dark and possibly one or two of the remaining FM outlets will stick it out. The Class B might still be able to serve the metro area while still providing programming to Anytown USA. The Class A with its reduced broadcast radius might be able to survive by serving its COL and surrounding towns with a specific niche format that appeals to potential advertisers. Under this scenario the impact on a professional commercial Part 15 AM radio station is likely to be catastrophic and put an end to the station. The town simply ain't big enough for more than one or two local broadcasters. One possible exception might be to offer some kind of niche ethnic programming for a few thousand immigrants should that demographic exist in that market and within the broadcast radius of the Part 15 AM broadcaster.

A second example:

A town (Othertown USA) with a population of 9,800 people is located 28 miles from a metro area of 800,000 people. Othertown USA has a Class C FM (originates its own programming) licensed to the city but the studio is located in the metro area along with others in the cluster. The station is a metro station and provides no local programming to the COL.

After the rule changes? In this situation it could be possible that the corporate owner might try to reduce the power to a Class A in order to reduce costs to make it more cost effective to service just the COL and surrounding communities. Or the owner might deem it possible to keep the power at Class C level and provide local programming to Othertown USA and still effectively service the metro area in order to obtain ad revenue. Under this scenario it is likely a professional commercial Part 15 AM would not be able to survive in such a small town with a live and local station.

Niche Markets For Part 15 AM Stations

The way I see it there still will be opportunities for professional commercial and non commercial Part 15 AM stations to go on the air and succeed in some markets. Clearly, any community within a metro area that currently does not have a licensed station is a fine candidate for a Part 15 AM operation. And even suburban communities in a metro area or neighborhoods within a city that fall under the radar screen from local programming on all the metro stations should be able to survive and possibly thrive under the new rules. But in cases where a Part 15 AM will now suddenly have to go head to head with a licensed commercial AM or FM that is now back in its COL and providing live and/or local programming, it is likely to spell the end to the Part 15 AM, at least as a professional commercial or non commercial entity unless they can find a specific niche for a few thousand potential listeners not presently being served. Ethnic programming is likely to offer an exception to this rule but only in certain markets. Hobby Part 15 stations that don't rely upon sponsors or advertisers for revenue will likely survive regardless of the market after the rule changes take effect.

Conclusion

Clearly major changes to the way commercial radio is programmed is just on the horizon. Owners of professional commercial and non commercial Part 15 AM operations that rely upon advertisers and sponsors to fund their station's will have to find a way to survive in a much more competitive environment. Moving operations to a city or suburb without local service seems to be the most prudent method for insuring survival. And offering some kind of niche format to a specific target audience not currently being serviced under the new rules in the new community would seem to be the next viable alternative and would not necessitate a move to a new community.