Eight is Enough

For now, at least, the big commercial radio companies are stuck with ownership caps.

The Federal Communications Commission (FCC) ruled this week there is no need to raise the number of stations a company can own in an individual market.

If you're old enough, you recall a time when a broadcast company could only own two radio stations in your town - one AM and one FM. For decades that limit served the industry well. Then deregulation occurred in the mid-90's and, suddenly, companies were allowed to own up to eight (8) stations in a major market. And in many big cities, that's exactly what happened. Not only did the biggest companies get bigger, but, in some cases, they would buy the eight stations with the strongest signals in town.

Before deregulation and consolidation, radio companies complained about competition from other media, in particular, cable television. But recently, those same radio companies have been moaning about another source of competition: the internet. That's why several years ago, the National Association of Broadcasters (NAB) got involved.

The NAB is a trade organization that represents the commercial radio industry. They lobbied the FCC to lift the 8-station ownership cap. The new number they wanted was twelve. It was argued that in order to be competitive, companies needed to own more and more of the radio pie.

While two used to be enough - and then eight was enough - the big companies said twelve was the new magic number. But this week, the FCC said 'no' to the NAB and ruled that the 8-station cap would remain in place.

It's way too late to save many of the great local broadcast companies that used to be part of many communities. Most are long gone, gobbled up by larger national chains with loosened ownership restrictions. That's why you might hear the same person doing traffic or weather reports on three or four (or more) stations; why the music playlist you hear in Seattle is exactly the same as what you'll hear in Portland or Miami or Denver; why in many towns that used to have robust radio news teams, there is little local news coverage at all.

Of course, radio doesn't have exclusivity when it comes to a flood of consolidation and deregulation. Many industries have been through similar upheaval. At least for now, however, the big corporate broadcast companies are on hold when it comes to growing caps.

But don’t expect the NAB or the handful of big commercial radio corporations to give up. For them, eight is not enough.