Don't touch that dial! The broadcast regulatory war will continue after this inauguration!

(This post contributed by guest author Guy Heston, whose professional career started with a broadcast position at a small radio station.  He has long enjoyed finding logical contradictions in the protestations of the rich and powerful.)

The National Association of Broadcasters must be drooling with anticipation. Breaking news—two Democrat appointees to the Federal Communications Commission, including the chairman, have announced their resignation, which will greatly enhance the NAB’s chances of achieving two signature items on its agenda, neither of which would be good for consumers.

The NAB has whined for years that the FCC has refused to adopt regulations that would force smart phone manufacturers to include FM radio reception on all phones, and further refused to relax regulations about media cross-ownership. I know these are not the most interesting topics for cocktail party conversations, but stay with me because they are indicative of what is likely to happen throughout the government with the incoming administration. You get to be for government regulations or against them at the same time, depending on whether or not they help your cause.

First let’s consider the FM radio reception issue. While it complains loudly and frequently about government regulations, the NAB is delighted to support a proposed federal regulation that would require all smartphones include a chip enabling over-the-air FM radio reception like your old transistor radio. The official talking point is that smartphone users should have access to terrestrial radio in the event of a local or national emergency just in case the internet breaks or something.

The FCC hasn’t been buying the talking point. Smartphone users already have reliable internet access to thousands of sources in the event of an emergency, including local radio stations. And if buyers feel strongly about it there are smartphones available for purchase that include the FM chip. Naturally, the chip isn’t free and adds to the cost of producing the phone, so why should consumers be forced to pay for it if they don’t want it? Now, with two new FCC appointees upcoming, consumers may have no choice. Although the law requires no more than three of the five FCC commissioners be from the same party, you can bet your Pandora app the commission will soon be controlled by corporate and NAB-friendly appointees.

I believe what the NAB really wants is to encourage you to listen to FM radio via a handy little icon on your phone. With roughly 30 million subscriptions to satellite radio and millions of others opting for Pandora, Spotify and iTunes, radio station owners are a bit antsy about all the competition. So much so that CBS, a media company founded on radio, has decided to spin off its radio division and let it sink or swim on its own. Lately CBS Radio has been laying off newscasters and reporters to lower costs in preparation for the spinoff.

But the FM chip issue pales in comparison to the FCC’s cross-ownership rules, which the NAB deems draconian regulations. In summary, the rules don’t allow the same company to run the local newspaper, radio and TV stations in any market in the interest of encouraging competition. Certain exceptions were famously made, so for instance Rupert Murdoch’s empire gets to own two New York TV stations, including the local Fox outlet, and the New York Post tabloid. Now there’s a lovely cross-ownership.

Many of the historic FCC rules about media ownership have been tossed over the past 20 years, so whereas we used to limit broadcasters from owning more than seven AM, seven FM and seven TV stations in the interest of media competition and diversity, we now have debt-leveraged conglomerates like iHeart Media owning 850 radio stations. We allow corporations to operate two TV stations in one market and hundreds all over the nation. But that’s not enough for the NAB. It wants the ability for television and radio stations and the local newspaper in your city to be owned and operated by the same company.

Here are some examples of what happens with all of this consolidation. According to the media monitor site FTVLive.com, viewers who tune in to their so-called local newscast on KPTM-TV in Omaha, Nebraska, might be surprised to learn the newscast originates from KMPH-TV, 1678 miles away in Fresno, California. Both stations are owned by Sinclair Broadcast Group, the same company that was recently reported to have laid off much of the news staff at WNWO-TV in Toledo, Ohio, saying the Toledo newscast would instead originate from its station in South Bend, Indiana. Broadcasters call it “hubbing”, which is corporate talk for saying it’s cheaper to do it this way. Why pay all those salaries in Toledo when you can pipe the newscast in from South Bend, 156 miles away? Sinclair owns 173 TV stations across the country, so there are lots of opportunities to pipe in broadcasts from who knows where.

Sometimes the cost reduction efforts verge on comical. So, again according to FTVLive,  viewers of the KCEN-TV newscast in Temple/Waco, TX, might have noticed the “new” set on the station’s newscast. Only it wasn’t new. After being used for nine years at KUSA-TV in Denver, the set was reportedly dismantled and shipped off to Texas. Why pay all those Texas carpenters to build a new set when you can just take an old one and brush it up a little bit? Both stations are owned by Tegna, which was formed when Gannett (owners of the USA Today national newspaper) decided to spin-off their broadcasting division. I guess we can give a little credit to Tegna for recycling at one of its 46 TV stations.

Across the nation, thousands of talented and experienced broadcast anchors, reporters, producers and other staff have lost their jobs in the interest of corporate consolidation and cost reduction. You might be surprised to learn that your local traffic report on your morning radio doesn’t originate from your local radio station, nor the weather forecast nor the news. The Los Angeles CBS all-news radio station was recently reported to have laid off three long-time anchors and reporters from an already dwindling news staff. I’m sure it will make the financial statements look better as the radio division is spun off. 

With the incoming administration, it won’t be just the media cross-ownership rules that will likely run into the ditch. And it might well be your next smartphone has FM radio reception whether you like it or not. Climate change, banking, etc. Pick your concern and we’ll strap ourselves in to see where the regulatory/anti-regulatory ride takes us. As they say in broadcasting, stay tuned!