FCC regulatory decision puts Internet radio, and broadcast, in their places

fcc logoIn a quadrennial update of rules which regulate how many stations a radio or TV company can own in a local market, the FCC rejected arguments that Internet radio creates meaningful local competition, and sustained the existing ruling of eight same-owned stations per market.

The key FCC conclusion that relates to Internet radio is that it is a “national platform,” not a local competitor to broadcast.

The federal document, which was adopted March 31 and released this week, responds to NAB (National Association of Broadcasters) lobbying points and says this about the status of Internet radio vs. broadcast listening:

“While NAB cited multiple sources that demonstrate that consumer interest in non-broadcast audio platforms is increasing — a conclusion we do not doubt — NAB failed to demonstrate that this increased interest was at the expense of broadcast radio listening or that these alternative platforms were meaningful substitutes for broadcast radio. Other commenters asserted that these alternate platforms such as satellite radio and Internet-delivered audio are growing in popularity, broadcast radio remains the dominant radio technology. In 2012, 92 percent of Americans age 12 or older listened to broadcast radio, a figure that has remained essentially constant over the last decade. […] And though recent data suggest that a significant portion of adult U.S. broadband households (42 percent) listen to Internet-delivered audio programming, we note that millions of U.S. households continue to lack broadband connections. In addition, only 14 percent of Internet radio listeners listen in their cars, where most broadcast radio listening occurs. Thus, we tentatively conclude that Internet-delivered audio programming is not yet a meaningful substitute for broadcast radio listening for most listeners.”

The document continued about how the FCC decision views local competition between broadcasting and Internet-delivered audio:

“We believe, moreover, that satellite radio and content delivered via the Internet generally are national platforms that are not likely to respond to competitive conditions in local markets. […] there is no evidence in the record that Internet radio stations and other Internet-delivered audio programming providers (excluding streams of local broadcast radio stations) modify their programming decisions to respond to competitive conditions in local markets. Ultimately, we tentatively find that only local broadcasters provide programming based on the unique characteristics of their respective local markets. As the Commission has stated previously, it is the competition between such rivals that most benefits listeners in a local market and serves the public interest — competition that is currently lacking from non-broadcast audio alternatives.”

The FCC action does not directly affect Pandora (which is briefly mentioned in the document) or other Internet-radio companies.

Brad Hill

One Comment

  1. I have an internet radio station that local merchants in my area have contacted about advertising on, is this illegal according to the FCC?

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