The Year-End Rant

By SCOTT FYBUSH

• THE YEAR IN SALES
• THE YEAR IN PROGRAMMING, CALLS AND FORMATS
• IN MEMORIAM

It's always a challenge to peer into the NERW crystal ball and figure out what the big story of the year to come will be. Two years ago, I confidently declared that 2001 would be the year of satellite radio - and how many people do you know who ended the year with an XM receiver in their car? Last year, I was just as confident in declaring that, where consolidation was concerned, "the genie is too far out of the bottle now to expect any regulatory change that would take us from a 1300-station group back to mom and pop."

The FCC isn't exactly known for surprises, but it was still a bit unexpected, then, to find the multiple-ownership rules on the Commission's agenda for review in 2003 - not just for the usual biennial rubber stamp, but for serious review that could actually lead to some changes in the inconsistent patchwork of outdated rules that now governs broadcast ownership in the U.S.

Early in this new year, the Commission will bring that review outside the Beltway with a series of public hearings, and it's not out of the question to think that some actual change just might result.

That's about as far as we'll go with the good news. The bad news is that the change is likely to be fairly minimal: a (very long overdue) repeal of the ban on newspaper-broadcast crossownership, perhaps, or an adjustment of the TV duopoly rules. The appropriate congratulatory press releases will be issued, a new round of deals will be made, and life in the broadcast world will go on pretty much uninterrupted.

But if we can dream (and what, after all, are these Rants really all about?), we can dream big. And so here's our Fearless NERW Plan to do something real about broadcast ownership:

License stations by clusters. It doesn't take much exposure to the real world of radio, circa 2003, to realize that the organizing principle of the broadcast world today is not the station but the cluster. From the biggest markets all the way up to Presque Isle, Maine, the idea of the individual station has become passe - not only in radio, where there's no longer anything unusual about finding six or seven or eight stations under a single owner in a single building, but even in television, where group after group is moving forward into the bold new world of duopoly.

The clustering of radio has been, as we explored in last year's Rant, a mixed blessing; the initial promises that it would allow niche formats to blossom, carried along by the huge profits of the more successful stations in the group, faded quickly in the face of the debt service needed to pay for all the station purchases (at inflated prices) that built the clusters. Today's cluster strategy (outside the pressure cookers of the top 25 or so markets) typically includes one to three hugely profitable FM stations, sometimes one successful AM news-talker, and a whole slew of "afterthought" stations, running jockless or indifferently voicetracked and existing only to sap a ratings point or two from the other clusters' hugely profitable flagship FMs.

And from the FCC's viewpoint, most of those "afterthought" stations aren't serving communities like Albany or Harrisburg or Burlington anyway - they were licensed under Docket 80-90 during the FM explosion of the late eighties and early nineties to serve suburban communities. The intent was good: to provide "first local service" for towns and villages that had never had a radio station to call their own. Good intentions, however, only go so far, and the commissioners who drafted the 80-90 rules never envisioned a world in which one company could own four or five of these signals in a single market - where they ended up providing no particular "local" service to the communities they glossed over once an hour in their legal IDs.

So what's a well-meaning regulatory agency to do? There's no putting the 80-90 genie back in the bottle; all those thousands of newish FM stations are here to stay, and there's no reasonable way to weed them out in any event. But let's run this up the folded dipole and see who salutes: why continue to license individual stations when it's the cluster that matters these days?

Here's the theory: RF doesn't stop at municipal boundaries, so why not hold stations responsible for "serving the public convenience, interest and necessity" everywhere within their service areas? And if you're going to do that for a cluster of seven radio stations, why should it matter which of those signals is contributing to meeting those public service requirements?

"Public service requirements"? Admittedly, that's a concept that has fallen out of favor with the deregulatory FCCs of recent years - but there's got to be a tradeoff of some sort for the free-for-all that's given a handful of big broadcasters an immense concentration of big signals in recent years while local news and information becomes a scarcer and scarcer resource on the airwaves.

So here's the plan: a sliding scale of requirements - real requirements - to provide local news and public service programming to the market each cluster is licensed to serve, on a sliding scale that depends on the number of stations in a cluster. If you're a single-station owner, it might be as little as an hour a week, cumulatively - easy to meet with just a few top-hour newscasts in morning drive. (I'd even consider waiving the requirement completely for single-station owners who don't own any stations in other markets, to make it easier for the remaining "little guy" broadcasters out there to compete.) As the clusters grow, so would the public service obligations; a cluster with eight stations in it would have to offer twenty hours or more a week of real local news and public service - but that obligation could be spread among several stations or consolidated on a single station in the cluster.

In practice, the result in most clusters would be one station that does a heavy dose of local news and talk and a half-dozen others that just shut up and play the music - and frighteningly enough, that would actually be an improvement over the status quo in a lot of places. Outside the largest markets these days, after all, there's usually only one station on the dial with a real local news committment; under this plan, there would be two or three in most markets, which pretty much gets us back to where the industry was thirty years ago before deregulation and the vast explosion of new signals and restores the news competition that has disappeared in too many markets.

Licensing clusters of stations has the potential to provide another benefit where community service is concerned: pull a stupid stunt like the Opie and Anthony nonsense last summer and what's at stake is no longer just a single license (which is threat enough when the signal is 102.7 in New York) but every station in the cluster. Used properly, we could be looking at a fearsomely powerful regulatory tool here.

That's the benefit to the listeners, but what's in it for the broadcasters? Two things, as I see it: first, licensing a cluster of stations in a metro market would give stations more technical flexibility. My colleague Garrett Wollman has proposed completely separating the licensing of technical facilities from the licensing of broadcast content providers, a concept already familiar to readers north of the border and overseas; I'm not ready to endorse that much of a break from the status quo, but I am suggesting that broadcasters who meet the public service standards could receive in exchange the ability to move what are now rimshot signals to better serve the metro areas that they truly intend to serve.

This might not mean much change in areas like New England where the dial is already short-spaced beyond belief, but a few limited windows to propose transmitter moves, particularly if stations are allowed to buy and sell interference rights under limited conditions, could mean a much more useful radio dial in places like Albany, Syracuse and Scranton - not to mention out west, where some much bigger moves might be possible once stations are allowed to abandon the fiction of providing "first local service" to a community 60 miles away from the urban core of their real market.

The other benefit to cluster licensing is the potential to create truly national radio services. A big broadcaster like Clear Channel or Viacom, freed of any local service responsibilities on several stations in a cluster by transferring them to the "news-talk" station in the group, might finally take "Kiss" or "Mix" to its logical conclusion and create a 24/7 national program feed on some of the signals that are now "afterthoughts," especially if they're able to be moved closer to the center of a market.

Cluster licensing could be a boon to the little guys, too: depending on how aggressively the public service requirements are ratcheted up as a cluster grows, some groups with little committment to local news and public service might find it more advantageous to spin off an "afterthought" signal or two, allowing it to return to the hands of a smaller owner. And the owners who have only one or two stations now are generally doing enough local service - because they have to in order to compete - that the new rules wouldn't be at all onerous.

(One area in which I'd like to see the rules be very onerous, though, is in the noncommercial FM dial. While the congestion in that part of the dial in the northeast has kept our area largely immune to the trend, 88-92 elsewhere in the country has become home in recent years to literally thousands of new signals controlled by just a handful of religious broadcasters. If Educational Media Foundation, American Family Association, Broadcasting for the Challenged and their ilk had to provide even the barest minimum of local public service at each of the "stations" where they now have just a satellite downlink and a transmitter, often squeezed in on a severely substandard signal (2 watts horizontal, 20 kilowatts vertical? It's not uncommon these days), their whole economic model would fall apart. Considering the way many of these new signals have, very deliberately, squeezed out translators and fringe reception of public broadcasters that were providing such public service, this column would weep no tears. And again, as we say every time we launch into this particular rant, we're not trying to smear all religious broadcasters; there are plenty of them that provide true local and regional public service, and many of them are just as peeved at the incursion of the national chains as we are.)

So that's the rant. By the time we get together for this little exercise next year, we'll see what the FCC actually does with the ownership rules - and we'll bet that it doesn't resemble this plan in the slightest! Your comments are, as always, welcome at rant@fybush.com; we'll start printing them right here when they start rolling in...

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