FCC Applies Rural Radio Policy to Block Move of Silent AM Station to New City of License – Do We Still Need a Rural Radio Policy? 

Our recent posts have been obsessed with the FCC’s regulatory fees and the issues with the CORES fee filing system miscomputing the fees for many radio stations (an issue that seemingly has now been resolved so that payments can be made by the September 26 deadline).  In doing so, we have minimized our coverage of some of the other interesting decisions and regulatory activity from the FCC and other agencies that affect broadcasters.  One of those actions involved the proposal of a now-silent AM station to move from the small Alabama community of  Bay Minette, Alabama to another small Alabama community, Spanish Fork.  The Commission issued a letter saying that they could not grant the application as the proposal would move the station from a rural area to a community within an urbanized area – the Fairhope-Daphne urbanized area.  The FCC found that this move would violate the FCC’s rural radio policy unless a showing could be made that there were public interest reasons to rebut the application of the policy in this case.  The letter gave the applicant 30 days to attempt to rebut the presumption against the move.   

The rural radio policy was adopted more than a decade ago to, in theory, preserve program diversity in rural areas by restricting the move of radio stations into more urbanized areas through community of license changes.  The policy restricts rural stations from changing their city of license to a location from which the station could place a principal city contour over 50% of any urbanized area (see our articles here and here for more details on this policy).  As the proposed move in the Alabama case would allow the AM to cover more than 50% of the Fairhope-Daphne urbanized area with its proposed new 2 mv/m contour, the change would be prohibited unless a special showing can be made overcoming the presumption against such moves, even though the move would allow the AM station to cover over 250,000 more people than it currently does.  The Commission notes that it also disfavors removing a second local service (a service licensed to a particular community) from a community of over 7,500 people.  As Bay Minette has over 7,500 people, and the town has only one other existing radio station, the move of the AM station would also run afoul of this policy.  These presumptions are very difficult, if not impossible, to overcome absent some showing that the FCC’s technical analysis is incorrect. 

The rural radio prohibition has been subject to much criticism over the years (see, for instance, our articles here, here and here).  We’ve suggested from time to time that this policy is one that might be considered by the FCC in when it looks to eliminate outdated broadcast regulations.  The prohibition was meant to protect program diversity in rural markets.  It requires stations to continue to serve those rural areas even if there is not an economic base to support that rural service.  Moreover, since the adoption of the policy, many other programming options have developed that are now available in rural areas through services including satellite radio and even internet delivered audio.  There are real questions whether the goal of protecting programming choice in these rural markets really preserves such choice or whether it instead just freezes in place existing stations that may economically prosper elsewhere.  We note that, in this case, the AM station requesting the city of license change is currently silent, and has had unresolved technical issues causing recurring periods of silence over the last several years, suggesting that any service that it is providing to the rural areas it currently serves is minimal – and that the public interest would really be served by allowing this station to move to a location where it has a better chance of economic success. 

The rural radio policy has also had the effect of freezing competition in urban markets.  New entrants, whose most cost-effective way of entering an urban market may be to move a rural station into that market, would promote competition.  Yet such moves are difficult or impossible because of the rural radio policy.  That is one of the reasons that many advocacy groups for minority ownership have called for the repeal of this policy (see, for instance, the comments of MMTC in the 2017 modernization of media docket). 

While this decision just affects one station, it illustrates an issue that can affect other stations seeking to overcome difficult operating conditions for radio stations throughout the country.  While no change in this policy is now pending, this would seem to be one policy worth review by the Commission in light of the changing economic conditions for radio in today’s media marketplace.