Restoring Vitality to the AM Revitalization Effort

The radio industry has been waiting for the FCC to finally release its long-awaited AM revitalization order. However, much of the optimism that was felt when the AM revitalization proceeding was initiated years ago appears to be screeching to a halt. Within the world of AM revitalization, nothing appears to outshine the ever-increasing reliance upon FM translators by AM stations. The FCC's rule change in 2009 allowing AM stations to have their signals retransmitted on qualifying FM translators was a huge step forward. Approximately 900 AM stations use FM translators to fill-in coverage of their local communities, which is frequently compromised (in the AM band) by interference from LED lighting, computer monitors, and other interference sources that continue to multiply. Translators also allow AM stations to maintain coverage of their audiences as market boundaries and population centers shift. Most striking, translators have enabled many AM stations to broadcast during nighttime hours for the very first time, providing live, on-the-scene coverage of high school sports, local political debates, and other events that usually occur at night, not to mention school closings, weather conditions, and traffic reports for early morning and late evening commuters.

However, the challenge is that FM translators frequently are not located where the AM stations need them, and when they are, they're incredibly expensive. In fact, as demand for FM translators has increased, so has their price. Acknowledging this, the FCC had at one time seemed willing to relax its current prohibitions on the ability to relocate FM translators to move them closer to AM stations by granting "Mattoon" waivers, which allowed a move with one long "hop" that would normally be a prohibited major change or that would require equally-discouraged multiple short hops. In addition, there were rumors being kicked around of a possible filing window for FM translators, limited to just AM stations owners.

However, time passed and no AM revitalization order was adopted and no filing window was opened. During this period in 2013 and 2014 the FCC delayed consideration of an AM-only filing window for FM translators for more than a year, while nonetheless working aggressively to process the 2,800 applications for LPFM applications filed during the 2013 LPFM filing window.

Then on the week of the NAB convention, with the LPFM process almost complete, FCC Chairman Wheeler released a blog post stating that the FCC would finally move forward with AM revitalization, but without the most promising proposal for AM stations and their listeners: an AM-only filing window for FM translators. Chairman Wheeler stated two concerns: (1) whether there are already enough translators available for AM stations; and (2) whether it is fair to give AM stations an "exclusive" FM translator window. Meanwhile, members of the FCC's Media Bureau have echoed this by telling us that they think there are already too many translators out there.

AM broadcasters are confused and surprised by the Chairman's doubts about expanding the universe of FM translators available for AM stations. For six years, the FCC has patted itself on the back for the success of its decision to allow AM stations to use FM translators. So what went wrong? Why is the FCC pulling back on its efforts to provide FM translators as a partial solution to AM revitalization? Was the AM revitalization stalled because of concerns about translator supply and fairness, or was it to preserve more FM frequencies for LPFM stations which may be allowed to increase their coverage?

Contrary to Chairman Wheeler's view contained in his blog, there are not enough translators to meet the needs of AM stations and their listeners. Currently, 719 AM stations do not have any FM translators within protected service contours - in other words, these stations can't buy or lease a translator at any price. Of the remaining 3,065 AM stations (that don't already have a translator), 553 stations must fight among themselves to obtain one of only 379 translators within their overlapping contours, leaving another 174 AM stations out of luck. All told, 893 AM stations have zero chance to obtain an eligible FM translator.

While these figures would improve a bit if you count translators that could be moved a few miles under a "Mattoon" waiver, the FCC has now cracked down on these waivers in recent months, making it increasingly difficult for AM stations to find a useable translator. In fact, earlier this year the FCC denied a Mattoon waiver that was similar to earlier granted long-hops, signaling a roll back of that new policy.

And this analysis does not reflect the fact that most of these potentially available translators are already being used by FM radio stations, further reducing supply. Hence the skyrocketing prices for FM translators, which have recently sold for tens of thousands of dollars in small markets, hundreds of thousands in mid-sized markets, and even a million dollars in one large market. Any FCC decision to reverse course and not open an AM-only window will push translator prices even further out of reach for AM broadcasters, most of whom already struggle to remain economically viable.

The Chairman's concerns about the exclusivity of an AM-only translator window are unfounded. Consider the 2013 LPFM-only filing window that will launch almost 2,000 LPFM new stations, and the earlier FM-only translator window that opened in 2003. Far from an exclusive opportunity, an AM-only window is nothing more than AM broadcasters finally reaching the front of the queue.

In the 1980s when I began my legal career representing Spanish language broadcasters, AM was the service with a low barrier to entry that allowed Hispanic broadcasters enter the market. Three decades later, those early Hispanic broadcasters grew to become some of the largest and most successful broadcasting companies in the country. Likewise, today AM remains a gateway service allowing new entrants and new ethnic and foreign-language services to break into broadcasting. In 2013, the FCC promised to help AM broadcasters overcome the significant technical and economic challenges that AM stations face, given the importance of local AM radio service. While my confidence has been shaken I sincerely hope that Chairman follows through.

[Blogmeister's Note: The following piece first appeared in Radio and Television Business Report - you may know it better as RBR+TVBR - which has been reporting on the broadcasting industry for nearly 30 years. The folks at RBR+TVBR have kindly consented to our reproducing the piece here.]