WASHINGTON, D.C.—The National Association of Broadcasters is once again urging the FCC to update what it calls an “antiquated broadcast regulatory regime” that “imperils the competitive viability of local television and radio stations.”
The “antiquated” rules regarding ownership caps and a host of other regulations could also force broadcasters to reduce investments in free local broadcast news and reduce the amount of free news and sports available to consumers, the NAB argued. The regulations also make it harder for broadcasters to provide newer innovative services like NextGen TV, aka ATSC 3.0.
“At some point the industry’s asymmetric burdens may well lead some broadcasters to conclude that the best competitive strategy may be a shift to offering audio and video content via unregulated platforms – and at a price to consumers,” the NAB argued.
The NAB made the comments in a June 6 filling after the FCC asked for comments for its biannual Communications Marketplace Report.
In the filing the NAB complained that “despite congressional intent and the total transformation of the audio and video marketplace since 1996 by digital technologies and the internet, the Commission has yet to address in any meaningful way its antiquated broadcast regulatory regime. From its ownership restrictions preventing necessary scale and discouraging investment, to its unwillingness to foster broadcast innovation, to its infatuation with paperwork and compliance burdens that serve to check political boxes more than the effective pursuit of important substantive goals, the FCC consistently refuses to consider how its regulatory approach imperils the competitive viability of local television and radio stations."
"Consequently, the Commission also fails to address, let alone answer, the fundamental question of how radio and TV broadcasters burdened by highly asymmetric regulations – and facing unprecedented competition for audiences and advertising revenues from much larger competitors – will be able to continue providing valued programming services, including news, increasingly expensive sports programming, weather, and emergency information, free to the public in local communities across the nation," the NAB continued. "Indeed, the Commission takes for granted that broadcasters must provide a service at their own expense but free to the public, even though it is a unique and enormous public service obligation: only radio and TV stations are required to provide their products directly to the public through local outlets for free.”
In the filing the NAB supplied extensive data showing that broadcasters now compete with much larger tech giants, with the largest broadcasting group Nexstar having a market cap of about $5.25 billion compared to Amazon with a market cap of $1.88 trillion and Alphabet with a $2.19 trillion market cap. It also stressed that less regulated streaming services dominated by these tech giants continue to siphon off viewers and ad dollars.
“Data from leading industry analysts, including Nielsen, Edison, Borrell, and BIA, all confirm that local broadcast stations have lost significant audience share and advertising revenues to their audio, video, and advertising market competitors,” the NAB noted. “Edison Research concluded after its most recent annual surveys that internet access is nearly universal and that the smart device triumph is nearly total, resulting in an audio and video marketplace unrecognizable to consumers of traditional local media in the analog era. Streaming now dominates the video marketplace, outpacing both broadcast TV and cable, and AM/FM radio (OTA and streams combined) garners just over one-third of Americans’ time spent listening to audio sources.”
“These fundamental market and technological changes have necessarily and dramatically affected the competitive position of advertising-supported free OTA radio and TV stations,” the NAB said. “The Commission, however, still refuses to admit that these transformative changes should in any way impact its broadcast regulatory regime or even to recognize that regulation is not costless. Indeed, rather than considering the cumulative toll that all its existing broadcast rules impose, the FCC appears intent on increasing the harm caused by its asymmetric regulation of OTA broadcasting via a series of additional rulemakings and proposed rules uniquely burdening radio and TV stations, increasing compliance risk for recordkeeping rules with vanishingly small public benefit, and discouraging investment in the broadcast industry.”
As part of the overhaul of broadcast regulations, the NAB once again urged the FCC to reform ownership rules.
“Reforming analog-era structural ownership rules will help broadcasters achieve reasonable scale and enable the industry to better attract vital investment,” the NAB said. “In addition, the FCC must take a hard look at regulatory policies that place speedbumps in the path of broadcast innovation but do not similarly burden the deployment of improved technologies by other participants in the communications marketplace. Rather than reflexively viewing broadcast innovation as a potential basis for more stringent regulation, the Commission should acknowledge that broadcasters need significant resources to invest in innovations such as ATSC 3.0, and actively seek ways to promote deployment of broadcast technologies enabling enhanced services to the public. Finally, the Commission must rethink its `we can regulate broadcasting so we must’ mindset and carefully consider how broadcast regulatory requirements in total burden the public’s free radio and TV services and discourage investment in their future.”
The full filing is available here.
