On Performance Tax and AM revitalization, a good week for Radio

posted on 10.26.2015

The past week was an especially good one for the Radio industry as broadcasters secured majority opposition in the House to a Performance Tax, as well as support from the FCC for a clear path to revitalization of the AM band.

Both issues have been at the top of TAB’s legislative and regulatory agenda for years and our efforts have garnered the bipartisan leadership of key Texas members of Congress.

Even as the record labels stepped up efforts last month to launch a grassroots campaign in favor of a Performance Tax, a resolution co-authored by Texas Reps. Mike Conaway, R-Midland, and Gene Green, D-Houston, opposing such a measure secured its 218^th supporter – the majority threshold needed to stymie consideration.

Texas leads the country in the number of co-sponsors of HConRes 17, the Local Radio Freedom Act, but TAB and NAB continue to recruit more as a buttress against incursions by the record labels who relentlessly continue to press their case in an attempt to peel off co-sponsors from the nonbinding resolution.

A list of Texas’ U.S. representatives’ position on the resolution is available here.

Just as the Performance Tax milestone doesn’t finally resolve that issue, the FCC’s move toward revitalizing the AM band will occur in steps, though the outcome is somewhat more reliable.

The action by the FCC authorizes AM stations to either acquire a translator within 250 miles and move it to an open frequency, or obtain a new translator to place in an available frequency through an AM-only filing window in 2017. Both windows will be bifurcated to provide Class C and D stations the first opportunity to obtain relief.

The effort got underway when Commissioner Ajit Pai declared AM revitalization a top priority for him shortly in his first appearance before broadcasters at the 2012 NAB Radio Show in Dallas.  It gained steam after TAB, in a meeting led by Ben Downs of Bryan Broadcasting, endorsed the effort and set forth a number of strategies that could provide relatively immediate solutions to the deteriorating sound quality on the band.

“This was a better outcome than I had hoped for,” Downs said. 

“It addresses the issues that AM Broadcasters said were their biggest needs. The waiver/window solution addresses both the need to do something fast and my fear that translator prices will escalate beyond affordability. 

“Commissioner Pai has earned a lot of air miles traveling to stations across the country; he knows the challenges to AM broadcasting aren't all self-inflicted,” he continued.

“In the next couple of years 850+ stations with little or no nighttime power will be able to serve their community day and night. That's a lot of extra service for small and medium-sized towns.”

After FCC Chairman Tom Wheeler announced opposition last spring to an exclusive FM translator window for existing AM stations, the effort – which had become a signature issue for Commissioner Mignon Clyburn when she served as Acting Chairman before Wheeler’s appointment – was feared lost.

TAB turned to key supporters in Congress, including Rep. Pete Olson, R-Sugar Land, and again Gene Green, D-Houston, to urge Wheeler and the Commission to set the revitalization effort back on track.

Such efforts and relentless engagement by the NAB resulted in the new order by the FCC which also raises a few more questions of the industry.

Attorney David Oxenford with Wilkinson Barker Knauer, who served as TAB’s legal counsel on this matter in meetings with the FCC, provides a summary of the FCC’s order.

The NAB notes that the FCC also issued a Further Notice of Proposed Rulemaking concerning several related issues that were not completely vetted in the NPRM, including:

Skywave – The FCC tentatively concludes that reducing protections for Class A stations will serve its goal of localism by allowing power increases for some local stations, and in some markets, enabling fulltime local AM service for the first time. Generally, the FCC seeks comment and data about stations and populations that may lose or gain service under this proposal, and whether the proposed changes to Class A protection standards strike a reasonable balance, among other questions.

Protections for Class B, C and D Stations – Similarly, the FCC proposes certain changes to the daytime protection standards for other AM stations to allow broadcasters more flexibility to overcome environmental noise that disrupts service.

Siting AM/FM Translators – The FCC proposes to relax the current standards for locating an AM/FM translator from the lesser of the 2 mV/m daytime contour of the AM station, or a 25-mile radius centered at the AM transmitter site, to the greater of these criteria. The FCC states this change will allow stations more flexibility to provide signal coverage, while not allowing an AM/FM translator to unreasonably extend a station’s coverage.

Dual Expanded Band – The FCC concludes that any licensee with dual standard/Expanded Band authorizations must surrender one of these authorizations within one year of a future Report and Order. The FCC states that the time is ripe for such licensees to make an election.

Lastly, NAB reports that the FCC also issued a Notice of Inquiry on two issues:

• The FCC seeks comment on opening up the Expanded Band to additional stations, and under what conditions, and asks whether this would be beneficial to AM radio service.

• The FCC seeks comment on a commenter’s proposal to relax the main studio requirements for AM radio stations, to provide broadcasters more flexibility to co-locate studios, reduce full-time staff present at the main studio, and other changes that would ease the burdens on AM broadcasters.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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