LPFM Will Likely Fail Again, Unfortunately

by on November 1, 2012 · 122 comments

“All this top-40s music sounds the same.”  I think we’ve all heard this sentiment.  The nature of regional radio broadcasting almost requires a regression to the mean in musical tastes.  A radio station cannot be all things to all people.  I suspect most people will be surprised to learn that some of the most innovative radio broadcasts are taking place at hundreds of stations across the country—and only few people can listen to them.  These stations, known as low power FM (LPFM), carry niche programming like independent folk rock music, fishing shows, political news, reggae, blues, and religious programming.  (And one station in Sitka, Alaska consists entirely of a live feed of whale sounds.)

The FCC began licensing LPFM stations in 2000.  These tiny stations typically cost under $10,000 to create but by law have the power to broadcast their signals only 3.5 miles out (the typical full power FM station has a 26-mile range).  Because of their limited listening area and alternative formats, LPFM stations have small but loyal audiences.

Using traditional FCC station spacing rules, over 100,000 LPFM stations potentially could be broadcasting in the United States.  Yet, despite the FCC’s hopes of “thousands of new voices” on the airwaves, today the number of LPFM stations is less than 1,000.  To this day, there’s only one LPFM station located in a top 50 media market, where most radio audiences live.  Why, more than a decade after these stations were first allowed, are so few in existence?

When faced with the regulatory restrictions imposed on LPFM stations it’s clear why there is so much untapped potential.  Power limits aside, LPFM stations are subject to onerous ownership and advertising rules that were pushed (typically) by the progressive media groups who lobbied for them.  LPFM stations can be licensed only to local entities, and those entities cannot own more than one station.

Further—and most limiting—stations must be noncommercial.  Despite their hyperlocal appeal, LPFM stations are prohibited from running advertisements from local restaurants, churches, retail stores, and car dealers.  Constrained to relying mostly on donations and volunteer staff, few stations ever get on the air.

Several forces conspired to bring about these crippling restrictions.  The FCC has long advocated “localism” in broadcast radio, thus the local ownership restrictions.  Further, many of the activists who pushed for LPFM stations are suspicious of large commercial enterprises and wanted noncommercial mandates.  These groups envisioned a nationwide network of nonprofit cooperatives broadcasting music and news for those with alternative tastes.  They unwittingly ensured that such a development would never become reality, outside of a few rural college towns.  (It’s also ironic that most stations seem to be church-affiliated.  But what other national nonprofit organizations can run stations comprised mainly of volunteers using donations?)

Additionally, the full power FM stations we all listen to in the car saw diminishing market share in their futures if upstart companies were able to string together several LPFM stations and siphon off some of their ad revenues and audience.  When it became obvious that LPFM was going forward a decade ago, I imagine full power stations didn’t object to the FCC and the activist groups’ efforts to make LPFM noncommercial and local.

Suddenly, this year, people are excited about LPFM again.  You see, after LPFM licensing began over a decade ago, the FCC and activists quickly saw that their vision of thousands of new stations wasn’t realistic.  In light of the disappointing launch, the FCC lobbied Congress for years to expand more LPFM licensing opportunities.  In response, Congress passed the Local Community Radio Act in 2011, which only marginally expanded opportunities for LPFM licensees.  I wish new LPFM applicants the best, but I don’t think there’s any reason to be excited.

First, the impact of the 2011 law is minimal and shows the futility of the FCC playing catch up to the marketplace.  The process to approve more LPFM stations took years.  In the meantime, listeners have several platforms for instant music access, including Pandora and Spotify streaming, iTunes, Sirius-XM radio, and cloud computing music storage.  And with the increasing popularity of smartphones, it has never been easier to have personalized, portable music selections.

Still, the FCC and the Congress spent years only nibbling at the edges of the matured broadcast radio market.  The modest change in the 2011 law, recently implemented, might enable dozens or perhaps a few hundred more stations.  But when 100,000 LPFM stations is the approximate ceiling, it’s clear how little things have really changed.  The activists will blame Big Radio for limiting LPFM in Big Radio’s markets, but the blame belongs equally to the noncommercial mandates.

LPFM stations, with liberalized rules that allow them to accept commercial sponsors and band together, could provide a dynamic alternative to the current music and radio broadcast landscape.  After a decade of filings, notices, and rule changes, the FCC and the activists will have LPFM is right back where it started—small, isolated, and rare.

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