2020-21319. Amendment of the Commission's Rules Regarding Duplication of Programming on Commonly Owned Radio Stations; Modernization of Media Initiative

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission eliminates the radio duplication rule, which restricts the duplication of programming on commonly owned stations operating in the same geographic area, for both AM and FM stations to reflect technological and marketplace changes since the current version of the rule was adopted in 1992. This approach will strike an appropriate balance between fostering our public interest goals of promoting competition and diversity and affording broadcast radio licensees greater flexibility to address issues of local concern in a timely fashion, facilitate digital broadcasting by AM stations, and ultimately allow stations to improve service to their communities.

DATES:

This rule is effective October 22, 2020.

FOR FURTHER INFORMATION CONTACT:

Jamile Kadre, Industry Analysis Division, Media Bureau, [e-mail], [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Report and Order in MB Docket Nos. 19-310 and 17-105, FCC 20-109, that was adopted August 6, 2020 and released August 7, 2020. The full text of this document is available for public inspection online at https://docs.fcc.gov/​public/​attachments/​FCC-20-109A1.pdf. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format, etc.) and reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) may be requested by sending an email to [e-mail] or calling the FCC's Consumer and Governmental Affairs Bureau at [phone] (voice), [phone] (TTY).

Synopsis

1. In this Report and Order (Order), we eliminate section 73.3556 of the Commission's rules (the radio duplication rule) to reflect technological and marketplace changes over the past three decades. As noted in the underlying Notice of Proposed Rulemaking (NPRM), there have been significant changes in the broadcast radio industry since the current version of this rule, which restricts the duplication of programming on commonly owned stations operating in the same geographic area, was adopted in 1992. By today's Order, we eliminate the radio duplication rule for both AM and FM stations. This approach will strike an appropriate balance between fostering our public interest goals of promoting competition and diversity and affording broadcast radio licensees greater flexibility to address issues of local concern in a timely fashion, facilitate digital broadcasting by AM stations, and ultimately allow stations to improve service to their communities. Through this Order, we continue our efforts to modernize our rules and modify or eliminate outdated and unnecessary media regulations.

Background

1. The Commission's broadcast radio programming duplication rules have evolved over time consistent with changes in the broadcast radio market. The Commission first limited radio programming duplication by commonly owned stations serving the same local area in 1964 by prohibiting FM stations in cities with populations over 100,000 from duplicating the programming of a co-owned AM station in the same local area for more than 50% of the FM station's broadcast day. The Commission observed that it had never regarded program duplication as an efficient use of FM frequencies; instead, it had allowed program duplication as, “at best, . . . a temporary expedient to help establish the FM service.” Accordingly, the Commission envisioned “a `gradual' process to end programming duplication once the number of applicants seeking licenses exceeded the number of vacant FM channels available in large cities.” At that time, the Commission sought to minimize the economic impact to radio broadcasters from limiting programming duplication. In particular, the rule allowed for waivers upon a showing that programming duplication would be in the public interest. It further provided that compliance would be monitored through the license renewal process.

2. In 1976, the Commission tightened the radio duplication restriction to limit FM stations to duplicating only 25% of the average program week of a co-owned AM station in the same local area if either the AM or FM station operated in a community with a population of over 25,000. Based on its 12 years of experience observing the effects of the radio duplication rule, the Commission delayed implementation of the tightened 25% limit on smaller cities for approximately four years, establishing interim limits that prohibited FM stations from duplicating more than 25% of average broadcast week programming of a commonly owned AM station in communities over 100,000 and 50% of programming of a commonly owned AM station in communities over 25,000 but under 100,000. At that time, the Commission observed that “the public does not have to depend on non-duplication to add diversity” when new broadcasting frequencies remained available. But given “the virtually complete absence of available [FM] channels as well as the strengthened economic position of FM” stations, the Commission adopted a tighter limit, finding that “the greatly diminished availability of FM channels in communities of any substantial size” could inhibit programming diversity. It also noted again “the inherent wastefulness of duplication,” i.e., that duplication of programming was an inefficient use of spectrum. This change also made the city size criterion apply both to the size of the city of the AM station as well as the size of the city of the FM station, rather than considering the size of the city of the FM station alone, as the previous rule had.

3. In 1986, in response to a petition for rulemaking seeking to exempt late-night hours when determining compliance with the radio duplication rule, the Commission eliminated the cross-service radio duplication rule entirely. It found that FM service had developed sufficiently to eliminate the rule and that FM stations were fully competitive, obviating the need to foster the development of an independent FM service through a requirement for separate programming. The Commission further found that the rule was no longer necessary to promote spectrum efficiency because market forces would lead stations to provide separate programming where economically feasible and, where separate programming was not economically feasible, duplication was preferable to a station's reducing programming or going off the air entirely in order to comply with the rule. In reaching this conclusion, the Commission noted that duplication could save costs for many AM stations experiencing economic difficulties due to listeners switching to FM.

4. In 1992, as part of a broad proceeding reviewing its national and local radio ownership rules, the Commission adopted a new radio duplication rule limiting the duplication of programming by commonly owned stations or stations commonly operated through a time brokerage agreement in the same service (AM or FM) with substantially overlapping signals to 25% of the average broadcast week. Principal community contours are defined as “predicted or measured 5 mV/m groundwave for AM stations and predicted 3.16 mV/m for FM stations.” A time brokerage agreement generally involves the sale by one radio licensee of blocks of time to a broker who then supplies programming to fill that time and sells the commercial spot advertising to support it. In setting the limit on programming duplication at 25% of the total hours of a station's average weekly programming, the Commission sought to strike an appropriate balance between affording stations the ability to repurpose costly programming and continuing to foster competition, diversity, and spectrum efficiency in the local market. The Commission saw no public benefit from allowing commonly owned same-service stations in the same local market to duplicate programming more than 25%, observing that, “when a channel is licensed to a particular community, others are prevented from using that channel and six adjacent channels at varying distances of up to hundreds of kilometers. The limited amount of available spectrum could be used more efficiently by other parties to serve competition and diversity goals.” The Commission also incorporated time brokerage agreements in the rule because it was concerned about the possibility that “widespread and substantial time brokerage arrangements among stations serving the same market, in concert with increased common ownership permitted by our revised local rules, could undermine our continuing interest in broadcast competition and diversity.” The Commission concluded, however, that some programming duplication had benefits, stating “we are persuaded that limited simulcasting, particularly where expensive, locally produced programming such as on-the-spot news coverage is involved, could economically benefit stations and does not so erode diversity or undercut efficient spectrum use as to warrant preclusion.”

5. As part of its continuing commitment to modernizing its media regulations, the Commission issued the NPRM initiating this proceeding in November 2019, seeking comment on the radio duplication rule and whether it should be retained, modified, or eliminated. As we noted in the NPRM, the broadcast industry has changed significantly since the Commission adopted the current radio programming duplication rule in 1992. In particular, significant growth in the number of radio broadcasting outlets, the advent of digital HD Radio, and the evolution of new and varied formats in which to disseminate programming (i.e., digital satellite radio, streaming via station websites, and mobile applications) have led to greater competition and programming diversity in radio broadcasting. Accordingly, we asked commenters to address several issues, including the impact of market forces on programming consolidation and the impact of the radio duplication rule on the Commission's public interest goals of localism and diversity, as well as on spectrum efficiency. We also sought comment on whether the Commission's prior rationale for eliminating the cross-service duplication programming rule—that duplication is preferable to curtailing programming or going off the air entirely where separate programming is not economically feasible—applies equally to the same-service duplication rule. We sought input on the benefits of allowing some level of programming duplication, as well as potential modifications to the rule. In addition, we asked whether the rule should treat stations in the AM service and the FM service differently in light of the particular economic and technical challenges facing AM stations. Finally, we asked commenters to discuss potential costs and benefits of modifying or eliminating the rule.

6. Four parties filed comments in response to the NPRM and two parties filed reply comments. Though the number of commenters in the proceeding was small, commenters represent a cross-section of the broadcast industry and proffer a variety of arguments both supporting and opposing changing the rule. Bryan Broadcasting Corporation supports, at a minimum, elimination of the rule as pertains to AM stations when one station transitions to all-digital transmission and one remains operating in analog and takes no position on the rule as pertains to the FM service. Common Frequency, Inc. opposes elimination of the rule as to both AM and FM stations, National Association of Broadcasters supports elimination of the rule as pertains to both AM and FM stations, and REC Networks supports partial elimination of the rule as pertains to AM stations and opposes elimination of the rule as pertains to FM stations. Kern Community Radio opposes elimination of the radio duplication rules as to both AM and FM stations and offers several proposals for strengthening the rule. The NPRM also sought comment on whether the radio duplication rule could implicate the First Amendment to the U.S. Constitution. However, no commenters addressed this issue.

Discussion

7. As discussed below, we eliminate section 73.3556 of our rules in order to provide radio broadcasters with increased flexibility in programming decisions. We conclude that the costs of continued regulation of radio programming duplication exceed the benefits of regulation, which we believe is no longer necessary. We find that the unique technical and economic challenges that AM broadcasters currently confront, coupled with the desire to facilitate an AM digital broadcasting transition, warrant eliminating the rule for AM licensees in order to provide them with greater flexibility, as advocated by several commenters. In so doing, we note that currently, AM stations may operate in a “hybrid” mode, transmitting both an analog and a digital signal using In-Band On-Channel (IBOC) technology. IBOC refers to the method of transmitting a digital radio broadcast signal centered on the same frequency as the AM or FM station's present frequency. Like FM band transmissions using IBOC technology, AM band transmissions place the digital signal in sidebands above and below the existing AM carrier frequency. By this means, the digital signal is transmitted in addition to the existing analog signal. In both instances, the digital emissions fall within the spectral emission mask of the station's channel. The present IBOC system is referred to as a “hybrid” because it is neither fully analog nor fully digital. During hybrid operation, existing receivers continue to receive the analog (non-digital) signal, while newer receivers incorporate both modes of reception, automatically switching to receive either the analog or the digital signal. Recently, the Commission has proposed to permit AM stations to operate in all-digital mode, rather than requiring that they maintain an analog signal alongside the digital signal in hybrid operations.

8. Similarly, we find that the benefits of eliminating the rule for FM licensees outweigh any potential negative impacts on public interest objectives of competition, program diversity, and spectrum efficiency for which the radio duplication rule was originally adopted. For these reasons, we find that the current rule no longer strikes the right balance between affording stations the ability to repurpose programming and continuing to foster competition, diversity, and spectrum efficiency in the local market.

9. Because we eliminate the rule, we decline to adopt CFI's proposals to (1) extend the programming duplication signal coverage area for AM stations and (2) assess duplication in the AM service on a case-by-case basis. We also decline to adopt (1) Kern's proposal that we extend the overlap areas of full-service stations; (2) REC's proposal that the Commission impose upon AM stations entering such duplication arrangements a requirement to surrender any cross-service FM translators after a certain time period; and (3) CFI's similar proposal to limit the number of FM translators licensed to a duplicated AM station or disallow use of FM translators by a duplicated AM station. The record does not support these proposals. In particular, commenters fail to explain why their proposals would be sufficient to alleviate industrywide pressures that make continued application of the rule overly burdensome. Additionally, having concluded that industrywide relief from non-duplication restrictions is warranted, we decline to require potentially struggling licensees to endure the administrative costs and burdens of seeking individual waivers that otherwise might be required were we to retain at least some radio duplication restrictions. Further, because we eliminate the rule for the FM service, we decline to adopt proposals to tighten or expand the radio duplication rule for the FM service, as requested by some commenters, specifically CFI's proposal that we extend the programming duplication signal coverage area for FM stations and Kern's proposal that we expand the radio duplication rule to include extending the overlap areas of full-service stations. As the commenters have provided only bare assertions as to these proposals, offering no specific evidence or analysis, we reject these suggestions that we expand the existing rule instead of eliminating it. We also decline to adopt proposals to expand the radio duplication rule to cover translators and NCE stations, as we find these proposals to be outside the scope of this proceeding. We similarly decline to address various other proposals, including NAB's request to modernize the translator duplication rule, CFI's recommendation to change the translator rule and have broadcasters specify the origin of programming received by satellite, and various suggested changes from Kern because they are likewise outside the scope of this proceeding.

10. AM Service. We conclude that the radio duplication rule no longer serves the public interest as applied to commonly owned AM stations in light of current marketplace conditions. As we have noted in several recent proceedings, the AM broadcasting service faces persistent interference issues that have hampered the service and frustrated both consumers and licensees. In particular, the service has faced an increase in the level of environmental and man-made noise over time, which has increased the amount of interference in the band. In addition, AM stations continue to be more difficult to operate and more expensive to maintain than FM stations, requiring larger and more complex physical plants, which are increasingly under pressure in urban areas.

11. Moreover, the AM service continues to contend with lower quality non-stereo audio and declining listenership. The technical challenges that the AM service has long faced have been compounded in recent decades by the continued predominance of FM radio in the broadcast industry and the introduction of alternative sources of higher-quality audio signals. These technical challenges lead to economic challenges, as the interference issues and lower-quality audio endemic to analog AM radio may drive down listenership, further reducing stations' ability to invest in order to meet these technical challenges. Additionally, the impact of the COVID-19 pandemic is exacerbating the economic challenges that many AM stations are already confronting. We find that permitting the additional flexibility of simulcasting may be useful to AM stations that are financially struggling. As the Commission observed in addressing this issue in the past, “where separate programming is not economically feasible, duplication of AM service is preferable to a struggling station reducing programming or going off the air entirely to comply with the rule.” Given these ongoing challenges, we conclude that the AM service would benefit from greater flexibility in making programming decisions and, in particular, from having the option to potentially repurpose costly programming on commonly owned stations.

12. Additionally, although the foregoing reasons alone provide a sufficient basis to eliminate the radio duplication rule for AM stations, we also agree with the majority of commenters in this proceeding that eliminating the radio duplication rule could help to ease the AM service transition from analog to digital broadcasting, both for stations and their audiences. As BBC observes, allowing AM broadcasters to operate in, and experiment with, all-digital transmissions, while retaining the ability to serve both analog and digital listeners would foster the conversion of the AM service to digital “without disenfranchising the listeners of a station who do not yet own a digital AM receiver.” Similarly, NAB and REC assert that eliminating the radio duplication rule would increase public awareness of the all-digital mode. That is, while our decision to eliminate the radio duplication rule for AM stations is not dependent on a Commission decision to permit AM stations to operate in all-digital mode rather than hybrid mode, we note that, in the event that the Commission permits all-digital AM operations, eliminating the duplication rule would permit a broadcaster with two commonly owned AM stations to simulcast the same programming on both stations, one in analog and one in digital. We also note that, should stations be permitted to make the digital transition, the technical capacity exists for them to transition from analog to hybrid to all-digital, rather than transitioning directly from analog to all-digital or simulcasting in hybrid and all-digital. Digital radio holds significant promise for AM stations, enabling them to provide sound quality that is equivalent, or superior, to standard analog FM sound quality. Digital AM radio also provides a clear, interference-free signal in contrast to AM analog radio, which is more susceptible to interference. Furthermore, experimentation in all-digital signals has shown potential promise in signal coverage robustness. In addition, technological innovations in all-digital radio allow for “advanced consumer-friendly features, such as real-time data and information displays, that are not available via analog AM radio.” Thus, allowing simulcasting could attract new listeners with the higher audio quality made possible by digital operations without eliminating the ability of analog listeners to continue to access the station's programming should all-digital signals ultimately be permitted. Furthermore, as NAB asserts, permitting such simulcasting would serve the public interest by enabling “broadcasters to build and maintain a robust audience across the market while evaluating how best to not only survive, but thrive, in the future.”

13. By eliminating the rule as applied to AM service, we would therefore eliminate a potential obstacle to a new technology that may serve to revitalize the AM industry. Proponents of all-digital AM broadcasting have asserted that “ `the benefits of authorizing all-digital AM will be widespread for broadcasters and listeners alike' ” and “ `a voluntary transition to all-digital AM service could help to reverse [waning AM audience share and advertising revenues] by enabling broadcasters to provide a pristine signal.' ” Although IBOC hybrid operations offer some ability for AM stations to provide digital service, the IBOC technology has not been widely used by AM stations. As stations are now increasingly exploring the potential for switching from all-analog to all-digital operations, it is logical for the Commission to remove legacy rules that may serve as impediments to a possible all-digital transition. Accordingly, eliminating the radio duplication rule as to the AM service has the potential to drive adoption of this new technology, if eventually authorized by the Commission, by enabling co-owned stations to offer digital programming to the community while maintaining the programming in analog.

14. FM Service. We conclude that the record demonstrates that eliminating the radio duplication rule as applied to the FM service would serve the public interest. Although the FM service does not face precisely the same persistent technical and economic challenges as the AM service, we find that the record supports eliminating the rule for FM stations in order to provide greater flexibility to address issues of local concern in a timely fashion, particularly in times of crisis. Moreover, we find that the existing waiver process is not an efficient means of granting regulatory relief in this context.

15. The current COVID-19 national emergency highlights the need to provide broadcasters increased flexibility to react nimbly to local needs, as circumstances have changed rapidly in different jurisdictions across the country since the beginning of the outbreak. Efforts to slow the spread of COVID-19 “have resulted in the dramatic disruption of many aspects of Americans' lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses across the country for indefinite periods of time.” In the past several months, the Commission has taken a number of steps to accommodate FCC licensees and regulatees in light of these disruptions. With respect to the radio duplication rule, NAB states that “allowing FM broadcasters to duplicate programming on a commonly owned station could be particularly helpful in times of crisis, including the one our nation is currently undergoing.” NAB notes further that “small broadcasters with fewer resources are especially vulnerable if one of their studio employees contracts the virus,” as “the rest of their staff may be forced to quarantine, making it difficult to produce original programming.” We agree and find that in such circumstances, the ability to quickly repurpose programming on commonly owned stations will allow such stations to use their limited resources efficiently, as well as to widely share critical news and health information with the local community. Of course, this same rationale applies to weather and other emergencies, “when it is in the public interest to allow stations to pool resources and simulcast emergency news and information without having to incur the expense and delay of obtaining a waiver.” In such emergencies, eliminating the radio duplication rule would provide FM stations with critical flexibility to duplicate programming from a sister station. Although stations can always seek a waiver of the Commission's rules, the waiver process may unnecessarily inhibit the ability of stations to react quickly and effectively to local emergencies and changes in circumstances. In addition, although current economic conditions are expected to be temporary, they have dampened advertising revenues across the industry and we see no reason to require broadcasters to bear the costs of seeking waivers where, as here, industry-wide relief is appropriate and, as discussed below, substantial program duplication on stations serving the same market is unlikely to be profitable.

16. Furthermore, we find that eliminating the radio duplication rule for the FM service has additional benefits, including helping stations inform listeners of a format change by permitting the simulcast of the new format on multiple stations. Accordingly, just as with AM, we believe there are potential benefits to permitting FM stations to duplicate programming as circumstances warrant, and we therefore eliminate the rule as to both radio services.

17. Despite our action today, we continue to believe that broadcasters have no incentive to limit their appeal and thus their revenues by simulcasting the same programming on multiple stations for long periods of time. Accordingly, bare assertions as to the continued usefulness of the radio duplication rule for the FM service—for instance, that the rule ensures “some basic level of diversity and . . . prevent[s] spectrum warehousing—are not persuasive. Kern, a self-described “prospective non-commercial community broadcaster,” states that there is a need for spectrum for new, diverse, and hyperlocal programming in the FM service and claims that programming duplication “stifle[s] local programming, diversity of programming, and new broadcast entrants.” However, to the extent that Kern believes regulation of radio station duplication will affect the availability of LPFM channels, we note that eliminating the radio duplication rule in order to provide commercial broadcast radio licensees with increased flexibility would have no impact on Kern's aspiration to become a noncommercial licensee. Nor does the record provide any evidence that the current limit restricting the duplication of programming to 25% of the station's average broadcast week has provided public interest benefits. Rather, we agree with NAB's assertion that “airing diverse content on commonly owned stations is the best way to reach the widest audience possible and maximize revenues.” Therefore, although in today's Order we provide additional flexibility to broadcast radio stations, we believe that licensees will prefer to maximize the potential for their stations to reach the greatest number of listeners with the greatest amount of programming. That is, we do not believe that duplication will be a common practice by station owners as a substantially increased amount of it is unlikely to be well-received by the marketplace. Rather, we anticipate that stations will likely use the ability to duplicate programming either in an effort to preserve broadcasting in both the AM and FM services, address issues of local concern in a timely fashion, respond to a crisis, or aid in a potential digital transition in the AM service. As a result, we believe that the costs of continued regulation outweigh the benefits of regulation; any potential negative impacts on public interest objectives that may result from our action will be minimal and will be outweighed by the public interest benefits identified above.

18. We note that some commenters' observations about some non-commercial educational licensees substantially duplicate programming on commonly owned NCE stations across separate markets across the country are inapposite to our consideration of the radio duplication rule, which addresses commonly owned commercial stations in the same market, because such programming duplication involves separate markets. We also find CFI's claim that elimination of the rule will harm minority broadcasters to be speculative and unsupported by the record. CFI supposes that, absent the non-duplication rule, a station that otherwise would have been “LMA'd to a minority broadcaster could simply just rebroadcast programming to another station.” CFI provides no evidentiary support, analysis, or explanation as to why this outcome is likely. To the extent its position is that a change in the radio duplication rule will lead to more consolidation, we do not believe that this rule change will give rise to new acquisitions of stations solely for the purpose of replicating the programming of an incumbent station already serving the same local area, as such a strategy appears unlikely to be profitable. Thus, we dismiss any assertion that our rule change will result in an increase in consolidation of radio station ownership. Furthermore, as noted above, we believe that existing station owners may use programming duplication in an effort to preserve programming in both services, to respond to a crisis, or to aid in a potential digital transition in the AM service, benefits that would accrue to minority as well as non-minority broadcasters.

19. Final Regulatory Flexibility Act Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Order. The FRFA is set forth in Appendix B.

20. Paperwork Reduction Analysis. This document does not contain new or revised information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13, (44 U.S.C. 3501 through 3520). In addition, therefore, it does not contain any new or modified “information burden for small business concerns with fewer than 25 employees” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4).

21. Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

22. Additional Information. For additional information on this proceeding, contact Jamile Kadre, [e-mail], of the Industry Analysis Division, Media Bureau, [phone].

Final Regulatory Flexibility Analysis

A. Need for, and Objectives of, the Report and Order

1. The current radio duplication rule prohibits any commercial AM or FM radio station from devoting “more than 25 percent of the total hours in its average broadcast week to programs that duplicate those of any other station in the same service (AM or FM) which is commonly owned or with which it has a time brokerage agreement if the principal community contours . . . of the stations overlap and the overlap constitutes more than 50 percent of the total principal community contour service area of either station.” In this Report and Order (Order), we eliminate section 73.3556 of the Commission's rules (the radio duplication rule) to reflect technological and marketplace changes over the past three decades, including the digital transition. As noted in the underlying Notice of Proposed Rulemaking (NPRM), there have been significant changes in the broadcast radio industry since the current version of this rule was adopted in 1992. Eliminating the radio duplication rule for both AM and FM licensees will afford broadcast radio licensees greater flexibility to address issues of local concern in a timely fashion, facilitate digital broadcasting by AM stations, and ultimately allow stations to improve service to their communities.

2. For AM licensees, we find that the unique technical and economic challenges that AM broadcasters currently confront, coupled with the desire to facilitate an AM digital broadcasting transition, warrant eliminating the rule for AM licensees in order to provide them with greater flexibility. The AM broadcasting service faces persistent interference issues that have hampered the service and frustrated both consumers and licensees. In particular, the service has faced an increase in the level of environmental and man-made noise over time, which has increased the amount of interference in the band. In addition, AM stations continue to be more difficult to operate and more expensive to maintain than FM stations, requiring larger and more complex physical plants, which are increasingly under pressure in urban areas. Thus, we find that permitting a broadcaster who owns two AM stations in the same local area to duplicate programming without regard to the degree of contour overlap between the two stations will serve the public interest by affording AM broadcast licensees greater flexibility to respond to marketplace conditions and ultimately will allow stations to improve service to their communities.

3. We also find that the record demonstrates that eliminating the radio duplication rule as applied to the FM service would serve the public interest. Although the FM service does not face precisely the same persistent technical and economic challenges as the AM service, we find that the record supports eliminating the rule for FM stations in order to provide greater flexibility to address issues of local concern in a timely fashion. Moreover, we find that the existing waiver process is not an efficient means of granting regulatory relief in this context. In emergencies, the ability to quickly repurpose programming on commonly owned stations will allow stations to use their limited resources efficiently, as well as to widely share critical news and health information with the local community. Although stations can always seek a waiver of the Commission's rules, the waiver process may unnecessarily inhibit the ability of stations to react quickly and effectively to local emergencies and changes in circumstances. Furthermore, we find that eliminating the radio duplication rule for the FM service has additional benefits, including helping stations inform listeners of a format change by permitting the simulcast of the new format on multiple stations. Accordingly, just as with AM, we believe there are potential benefits to permitting FM stations to duplicate programming as circumstances warrant, and we therefore eliminate the rule as to both radio services.

B. Summary of Significant Issues Raised by Public Comments in Response to the IRFA

4. There were no comments to the IRFA filed.

C. Response to Comments by the Chief Counsel for Advocacy of the Small Business Administration

5. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

D. Description and Estimate of the Number of Small Entities to Which the Rules Apply

6. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

7. The rule changes adopted herein will directly affect certain small radio broadcast stations, specifically commercial AM and FM radio stations. Below, we provide a description of these small entities, as well as an estimate of the number of such small entities, where feasible.

8. Radio Broadcasting. This U.S. Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public.” Programming may originate in the establishment's own studio, from an affiliated network, or from external sources. The SBA has created the following small business size standard for such businesses: Those having $38.5 million or less in annual receipts. Economic Census data for 2012 show that 2,849 firms in this category operated in that year. Of that number, 2,806 operated with annual receipts of less than $25 million per year, 17 with annual receipts between $25 million and $49,999,999 million and 26 with annual receipts of $50 million or more. Based on this data, we estimate that the majority of commercial radio broadcast stations were small under the applicable SBA size standard.

9. The Commission has estimated the number of licensed commercial FM radio stations to be 6,726, the number of commercial FM translator stations to be 8,188 and the number of commercial AM radio stations to be 4,580, for a total of 19,494 commercial radio stations. Of this total, nine commercial radio stations had revenues of $38.5 million or greater in 2018, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Database (BIA) on June 15, 2020. All other commercial radio stations qualify as small entities under the SBA definition. Of this total, nine commercial radio stations had revenues of $38.5 million or greater in 2018, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Database (BIA) on June 15, 2020. All other stations qualify as small entities under the SBA definition.

10. In assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific radio station is dominant in its field of operation. Accordingly, the estimate of small businesses to which the proposed rules may apply does not exclude any radio station from the definition of small business on this basis and is therefore possibly over-inclusive.

E. Description of Projected Reporting, Record Keeping and Other Compliance Requirements

11. The Order eliminates the radio duplication rule as applied to AM stations and FM stations. Accordingly, the Order does not impose any new reporting, recordkeeping, or compliance requirements for small entities. The Order thus will not impose additional obligations or expenditure of resources on small businesses.

F. Steps Taken To Minimize Significant Impact on Small Entities, and Significant Alternatives Considered

12. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

13. In this proceeding, the Commission has three chief alternatives available for the radio duplication rule—eliminating the rule in its entirety, retaining the rule in its entirety, or modifying the rule in some other form. The Commission finds that the public interest and marketplace realities support eliminating the rule in its entirety, i.e., eliminating the restriction on radio duplication for both AM and FM stations. Further, should the Commission permit AM stations to operate in all-digital format, elimination of this rule will facilitate the transition to all-digital broadcasting by allowing an AM station to simulcast its programming on two stations in analog and digital format. Given that most commercial broadcast stations qualify as small entities, eliminating the rule will help small entities by providing greater flexibility for those stations that require it in order to continue providing programming. Specifically, eliminating the radio duplication rule for both AM and FM stations would allow broadcasters to repurpose programming on commonly owned stations.

G. Report to Congress

14. The Commission will send a copy of this Second R&O, including this FRFA, in a report to Congress and the Government Accountability Office pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Second R&O, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Second R&O and FRFA (or summaries thereof) will also be published in the Federal Register.

H. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule

15. None.

Ordering Clauses

16. Accordingly, it is ordered that, pursuant to the authority found in sections 1, 4(i), 4(j), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), and 303(r), this Order is adopted.

17. It is further ordered that, pursuant to the authority found in sections 1, 4(i), 4(j), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), and 303(r), the Commission's rules are amended as set forth in Appendix A, effective as of the date of publication of a summary in the Federal Register.

18. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

19. It is further ordered that, pursuant to Section 801(a)(1)(A) of the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), the Commission shall send a copy of the Order to Congress and to the Government Accountability Office.

20. It is further ordered that, should no petitions for reconsideration or petitions for judicial review be timely filed, MB Docket No. 19-310 shall be terminated and its docket closed.

List of Subjects in 47 CFR Part 73

• Radio

Federal Communications Commission.

Marlene Dortch,

Secretary.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

PART 73—RADIO BROADCAST SERVICES

1. The authority citation for Part 73 continues to read as follows:

Authority: 47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.

2. Section 73.3556 is removed.