FCC Commissioner Declares War On Subcaps


FORT LAUDERDALE, FLA. — “While we need to look at raising the overall ownership caps within a market, there is little reason to maintain the subcaps.”

Those words were among the biggest delivered Tuesday afternoon (3/28) by Republican FCC Commissioner Michael O’Rielly, who opened the Hispanic Radio Conference with a declaration that the ownership of eight FMs in a market is something he’s willing to allow.

In a wide-ranging Keynote Address that opened the industry’s only dedicated confab devoted to Hispanic AM, FM and digital audio companies, O’Rielly immediately dove in to the Commission’s radio ownership limits by calling them outdated.

Accepting that some attendees may not care about media ownership, O’Rielly contends that all involved in media should. “Artificially limiting your ability to buy or sell radio stations or combine with television or newspapers affects the valuation of your stations, raises the cost for debt, prevents the exploration of market synergies, and keeps you from best serving your communities,” O’Rielly said. “I am not going to suggest that consolidation or aggressive purchasing in your market is appropriate.  But, preventing you from even considering such deals is harmful to the long term health of your stations.”

Turning to the AM/FM subcap limit, O’Rielly suggested that the radio industry and others “have made a compelling case that these limits no longer make any sense.”

He added, “If the Commission believes that your only competitor is the man or woman sitting next to you, it is sadly mistaken.” That’s because AM and FM are no longer completely separate and distinct mediums, he notes.

“Essentially, every content distributor is part of one big marketplace,” O’Rielly said. “That’s great for consumers, but it means we are imposing discriminatory and harmful limitations on your businesses’ ability to compete.”

While some may argue that the subcap limits “keep existing stronger and larger AM station owners from selling and shifting to FM stations,” O’Rielly notes, “even if this was once true, the Commission’s AM radio revitalization efforts, especially giving AM operators the ability to obtain and use FM translators, have curtailed or completely eliminated this distinction by improving the ability of AM radio stations to cover and serve markets.  Moreover, even if bigger AM owners exited, opting for FM stations, it would only increase the chances for new entrants, like Hispanic radio and others, to serve diverse and niche populations.  Since minority ownership has been one of the biggest obstacles to modernizing our media ownership rules in the eyes of some, isn’t this potentially a good thing? ”

The comments came after O’Rielly opened his address by jokingly noting that with his surname, “it should come as a surprise to no one that I lack any demonstrable Hispanic lineage.  Moreover, I am not going to try to impress you by displaying my mastery of the Spanish language, which quite honestly I don’t possess.”

And, while O’Rielly may not seem like an ideal keynote speaker at a conference dedicated to Hispanic radio, he said the attendees were all gathered in South Florida “because of our truly unifying feature: our immense interest in radio broadcasting.  For the FCC, it’s a responsibility; for you, it serves as a profession; and for all of us, it should be a passion.”