FCC Prepares To Reopen Quadrennial Review.

The Federal Communications Commission is once again reviewing its broadcast ownership limits, with radio squarely in the spotlight. The draft quadrennial rulemaking has been released ahead of the Commission’s September open meeting, and it is offering some clues where things may be headed. The review could reshape how many stations a single company can own in a market — and whether AM and FM sub-caps should survive.

The biggest potential impact for radio will be a review of the Local Radio Ownership Rule, which limits how many AM and FM signals a company can control in a given market. The Commission is asking whether those limits remain relevant in an era of digital competitors. Or whether they are “limiting the ability or potential of broadcast radio to deliver public interest benefits to listeners.

A central question is whether the FCC should continue treating radio as a standalone market. The rulemaking will seek comment on whether the FCC should revise the audio market definition to include such non-broadcast audio sources as satellite radio, audio streaming services, webcasting, podcasting, or other programming platforms as substitutes for broadcast radio. That includes whether online platforms “compete directly” with broadcast radio, and what challenges they pose to revenues and business models.

The Commission will look for feedback on issues such as whether radio’s local nature still makes it irreplaceable. Core characteristics, such as whether it’s free, over-the-air availability, or local nature, make it unique or difficult to substitute in the audio marketplace, have loomed large in the past. And the draft suggests it will be part of the consideration again as the Commission goes forward.

There is also the element of advertising. The FCC is seeking input on whether advertisers view other audio sources as substitutes for broadcast radio, as well as how big tech giants like Google and Facebook are reshaping local ad markets.

On limits, the Commission questions if the current tiers — topping out at eight stations in the largest markets — are still appropriate, or whether new population-based metrics are needed. It also floats whether digital upgrades, particularly for AM, should factor into ownership rules.

The rulemaking will also revisit the issue of AM/FM sub-caps, acknowledging arguments that eliminating them could “jeopardize the viability of AM radio stations” by causing “a migration of ownership or investment from AM to FM stations.”

Even as much of the focus has been on what the impact will be on major markets, the rulemaking will also include an analysis of whether there are steps that could be taken that could bring relief for small operators and struggling outlets. Among the questions the FCC is set to consider is whether there should be case-by-case reviews of proposed over-the-limit acquisitions, or adjustments based on a station’s actual reach rather than just the number of signals. One idea is limiting or permitting consolidation based not only on the number of stations an entity owns, but also making the decisions based on the relative strength or reach of those stations within local radio markets.

More broadly, the Commission continues to frame the debate around its enduring policy goals of “competition, localism, and viewpoint diversity” as it reviews local radio and television ownership limits. But it says it is also working toward recognizing new platforms, from podcasts to streaming, that complicate traditional definitions of radio markets.

The rulemaking proposal is expected to be approved at the Sept. 30- meeting, after which a new comment filing window will be opened.

The latest effort (MB Docket No. 22-459) follows a similar outline as was released in December 2022 when the Media Bureau got the current quadrennial ball rolling. Both documents are mainly filled with questions, leaving broadcasters an open slate on which to comment. But they also show what the lynchpins may be as the Commission moves forward with its decision-making. And FCC Chair Brendan Carr has suggested he will be push for more sweeping updates than adopted by the Commission in earlier quadrennial reviews.