Happy New Year! Got a few days to spare? If so, the FCC’s just-released 2022 Communications Marketplace Report may be worth a read. But, be prepared to download five PDF files — the first of which totals 322 pages.
What’s the key takeaway?
That’s not exactly an easy question to answer, as the lengthy and comprehensive report devotes much space to The Fixed Broadband Services Marketplace, The Mobile Wireless Marketplace, Voice Telephone Services, and The Satellite Marketplace before discussing the Video Marketplace — inclusive of Broadcast Television Stations. Then, there’s a section devoted to the Audio Market, inclusive of radio and Sirius XM Satellite Radio.
What is the Communications Marketplace Report? It was authorized with the 2018 passage of the RAY BAUM’s Act. As such, the Commission is required to publish this report, the third since it was authorized, every two years to generally assess the state of competition across the broader communications marketplace.
“The Commission must evaluate competition to deliver voice, video, audio, and data services among providers of telecommunications, providers of commercial mobile service, multichannel video programming distributors, broadcast stations, providers of satellite communications, Internet service providers (ISPs), and other providers of communications services,” the FCC explains.
Given the desire by Republican FCC Commissioners and the NAB to loosen media ownership rules, given competition from unregulated digital media, the report could be vitally important to both broadcast radio and television licensees seeking D.C. rule changes that could positively impact their businesses.
It could, in a small way, even influence Canada’s competition regulators, which are currently engaged in a bitter battle over whether media giant Rogers Communications should complete its merger with Shaw Communications, resulting in a spin-off of a wireless services unit to Vidéotron.
As part of its evaluation, the FCC must consider all forms of competition, including “the effect of intermodal competition, facilities-based competition, and competition from new and emergent communications services.” The Commission also must assess whether laws, regulations, regulatory practices, or marketplace practices pose a barrier to competitive entry into the communications marketplace or to the competitive expansion of existing providers of communications service.
‘A SUBSTANTIAL STATE OF CHANGE’
The first thing the FCC notes with the release of the 2022 Communications Marketplace Report is that the U.S. communications marketplace “is in a substantial state
of change and re-examination.” During the past two years, the COVID-19 pandemic drove millions of people to work and learn remotely, and consumers’ demand for fixed and mobile broadband, video, and audio services increased significantly, the Commission notes.
“At the same time, there were considerable developments in the regulatory, technological, and business environment that will likely influence competition in the sector in the coming years,” it adds.
As such, the Commission sees “an emerging set of issues and opportunities presented by these changes in the marketplace: some trends that are encouraging and others that may pose challenges.”
First, the Commission concludes, is the potential for more competitive broadband markets.
Second is change in the wireless sector in the 5G era.
Third is the rapid expansion of LEO satellite constellations and the emergence of new
players in the commercial satellite industry.
As part of its broadband and cable services analysis, the FCC shared 2020 U.S. Census data reflecting the total population coverage by technology. COVID-19 fueled fixed wireless across the nation.
On Page 161 of the report is the first mention of broadcast television stations, following an assessment of the OTT marketplace.
The Broadcast TV station is largely explanatory in nature, offering a remedial view of the marketplace. For instance, a chart of the largest broadcast TV station groups — as of today, prior to any regulatory approval of announced transactions — was offered:
Distribution and delivery is discussed, along with programming and content ownership. Again, the Communications Marketplace Report serves as a publicly available Congressional Research Service analysis, if you will, offering all of the basics and facts needed to fully understand the business of broadcast media as publications such as Radio + Television Business Report provide readers. It delves into broadcast television revenue and how the price of an advertising spot is reached. There’s also an explanation of retransmission consent revenue. And, there’s a chart of broadcast television station industry gross revenue trends.
Before a discussion on radio and audio is had, an interesting chart reflecting Local Advertising Gross Revenues by Sector is shown.
The Audio Market
The 2022 Communications Marketplace Report offers a layman’s overview of the audio programming landscape. It also offers a Top 10 by revenue of the nation’s radio licensees, with “Terrier” reflecting Cox Media Group.
The FCC used data compiled by Kagan’s Volker Moerbitz, rather than Miller Kaplan data. And, the U.S. terrestrial radio revenue performance between 2005 and 2021 shows that the struggles experienced during the “Great Recession” were never fully realized prior to the COVID-19 downturns in mid-2020.
The Communications Marketplace Report also includes rudimentary details on what the podcasting landscape is like today, and cites the Edison Research “Share of Ear” report to gauge and assess audio programming competition.
And, it concludes with a review of the commission’s work, and its agenda for the video and audio communications marketplace.
While the report reads like a college term paper, it did see one Commissioner approve in part and concur in part, leading him to issue a brief statement. Brendan Carr reiterated his concerns first expressed in 2020, in which he said, “I would go even further than the Report does in recognizing the converged market for connectivity that now exists. The Commission’s decades-old approach of viewing different technologies—including
mobile, fixed, satellite, and broadcast offerings—as competing in distinct and separate markets no longer matches the way that Americans consume these services.”
Two years later, that approach has not yet been modified.
To view the 2022 Communications Marketplace Report in full, please click here.
