The Federal Communications Commission, seeking to bolster the ailing radio industry, has voted to let financially successful broadcast owners buy more radio stations.
The FCC will now allow one company to own 30 AM and 30 FM stations nationwide, instead of 12 AM and 12 FM stations with only one of each in a single community.A company will be able to buy from three to six stations in a single market, depending on the size of the community.
Commissioner Andrew Barrett abstained from the 4-0 vote, saying the action seemed "based more on wishful thinking and personal goals than upon a thorough and balanced examination of real-world market implications, public interest concerns and economic factors."
He said he would have preferred a more modest relaxation of the rules phased in over a period of years.
He also said he was concerned about the effects of the change on minority ownership.
Rep. Edward Markey, D-Mass. and the chairman of the House telecommunications subcommittee, also criticized the decision, saying it would stifle diversity. He said he would introduce legislation to reinstate stricter rules.
But FCC Chairman Alfred Sikes and the others said the action was necessary to save failing radio stations.
Of the approximately 10,800 commercial radio stations in the country, more than 100 stations have shut down in the past year, a number are in bankruptcy and hundreds are restructuring debts, say industry analysts.
They say the industry got into trouble because of deregulation in the mid-1980s. Loans were easier to get and more stations were allowed to go on air. Then the recession hit, advertising dollars dried up and stations began to fail.
Among the mass media, radio is probably the least expensive to operate. An FCC staffer said there are about 8,000 owners, most of whom own one station.
Under the new rules, the number of stations a single owner can possess in one community depends on the total stations available to listeners. Conditions are:
- Less than 15 stations, owners can acquire three stations, with no more than two being FM, provided the stations together represent no more than 50 percent of the listening audience.
- Fifteen to 29 stations, two AMs and two FMs, provided the audience share is no more than 25 percent.
- Thirty to 39 stations, three AMs and two FMs, provided the audience is no more than 25 percent.
- Forty or more stations, three AMs and three FMs, provided the audience is no more than 25 percent.
Although the stations purchased by a single company could represent no more than 25 percent of the listening audience in most markets according to rating books at the time of sale, nothing prohibits the owners from changing programming to boost listenership above that.