The National Association of Broadcasters (NAB) has raised significant concerns about the Federal Communications Commission’s (FCC) regulatory approach, which it claims is jeopardizing the future of local radio. According to the NAB, the FCC’s focus on compliance and paperwork has overshadowed the critical need to support local broadcasters who provide essential services such as news, sports, weather, and emergency information.
For the past 25 years, the NAB argues, the FCC has failed to modernize its broadcast regulatory framework. This has left radio and television broadcasters burdened with outdated and asymmetric regulations. These regulations, the NAB says, are particularly onerous given the fierce competition broadcasters face from Big Tech companies for both audiences and advertising revenue.
The NAB’s critique comes as part of the government’s biannual review of the communications marketplace. The association contends that the FCC’s preoccupation with compliance burdens serves more to “check political boxes” than to ensure that broadcast content remains free and widely accessible. The NAB warns that if the FCC continues to ignore the pressing issues facing broadcasters, some may find it more viable to shift their content to unregulated platforms, potentially at a cost to consumers.
Streaming services already account for over one-third of the time Americans spend listening to audio, a trend that underscores the competitive pressures on traditional broadcasters. The NAB’s review is particularly scathing, suggesting that the FCC appears intent on exacerbating the challenges faced by over-the-air broadcasters through additional rulemakings and proposed rules that uniquely burden radio and TV stations. The association also accuses the FCC of increasing compliance risks for record-keeping rules that offer minimal public benefit, thereby discouraging investment in the broadcast industry.
The FCC is legally required to assess the communications marketplace every two years. The comments collected during this review will be used to draft a report that evaluates competition across audio, video, voice, and data services industries, with the findings presented to Congress. In its current review, the FCC is dividing the audio market into three categories: over-the-air radio, satellite radio, and online service providers, and assessing competition within each vertical.
In its submission, the NAB makes a strong case for regulatory relief for local radio stations, which it says face “fierce and ever-increasing competition” for audiences. Citing data from Edison Research, the NAB points out that streaming services are significantly eating into the time spent with over-the-air radio. In May 2014, AM/FM radio accounted for 52.1% of all time spent listening to audio sources. By the end of 2023, this share had fallen to 36%.
The NAB’s concerns are not without merit. The FCC’s regulatory approach has led to a series of additional rulemakings and proposed rules that uniquely burden radio and TV stations. This has increased compliance risks for record-keeping rules that offer minimal public benefit, discouraging investment in the broadcast industry.
The FCC’s recent decision to partially reverse a 2020 ruling that eliminated the simulcast rule for FM stations is a case in point. The original decision, made by a Republican-majority FCC, had scrapped the radio duplication rule that limited stations to airing up to 25% of total hours in an average broadcast week of duplicative programming. However, the current Democratic-majority FCC has reversed this decision, arguing that the rationale for providing AM radio with additional flexibility does not pertain to FM radio.
The NAB had initially supported the expansion of the rule to include FM stations, arguing that it would provide broadcasters with the flexibility needed to compete in a rapidly changing market. However, advocacy groups like the MusicFirst Coalition and the Future of Music Coalition opposed the expansion, arguing that it was “highly problematic both substantively and procedurally.”
The FCC’s decision to reinstate the radio duplication rule for FM stations has significant implications for broadcasters. Some stations that started simulcasting during the past four years will need to break those combinations apart. The FCC is providing a six-month grace period for broadcasters to comply with the reinstated rule and is allowing operators to seek waivers under special circumstances.
The NAB’s concerns extend beyond the duplication rule. The association argues that the FCC’s regulatory approach is out of step with the realities of the modern media landscape. The NAB contends that the FCC’s focus on compliance and paperwork is discouraging investment in the broadcast industry at a time when broadcasters face unprecedented competition from unregulated digital platforms.
The NAB’s critique of the FCC’s regulatory approach highlights the need for a more balanced and forward-looking regulatory framework. As the communications marketplace continues to evolve, it is crucial that the FCC addresses the unique challenges faced by local broadcasters. Failure to do so could result in a significant shift of content to unregulated platforms, potentially at a cost to consumers and the public interest.
