Carr 'Leaning' Toward NAB-style Subcap Plan, He Tells Federalist Society

FCC Commissioner Brendan Carr is “leaning” toward a plan to loosen radio subcap limits that leave some limits in place in cities but open up ownership limits in smaller markets, he said at a Federalist Society luncheon Tuesday. Carr said he hasn't made a final decision. He acknowledged the plan proposed by NAB and described in the 2018 ownership quadrennial review NPRM is “consistent” with where he's leaning.

“Particularly in smaller markets, we have to be doing everything we can to incentivize investment in local news gathering,” Carr said. “Some limits” in bigger cities “could make sense,” he said. NAB's proposal would allow licensees in the top 75 markets to own up to eight FM stations instead of the current five, and do away with FM subcaps in all other markets. AM subcaps would be eliminated nationwide, and licensees in the top 75 markets could increase their limit to 10 FM stations by acting as incubators for new entrant broadcasters. Commissioner Mike O'Rielly has also spoken favorably of the NAB plan (see 1809270059). “I can't endorse any particular proposal,” Carr said.

Carr compared the fate of radio to the demise of newspapers, which he said weren't helped by FCC regulations barring cross ownership of newspapers and TV stations. "We're on the precipice of seeing print die, and radio isn't far behind," said Borrell Associates CEO Gordon Borrell on a later panel. Advertising is "lifeblood" to both industries, Borrell said. "Newspapers are a cautionary tale for radio," tweeted Carr aide Evan Schwartztrauber Tuesday during the event.

“I'll take any help I can get,” said Connoisseur Radio CEO Jeff Warshaw of the NAB plan during a later panel. Though Warshaw has previously advocated complete elimination of the subcaps, he conceded so radical a shift might not be politically feasible. Radio will die “unless and maybe even if” it gets regulatory relief, Warshaw said. NAB's plan would help, he said.

Opponents of the subcap plan have expressed concern it would lead to the elimination of AM radio. Warshaw disagrees. AM radio could persist under AM specialty owners, and the deregulation could create opportunities, he said. Warshaw said he wouldn't discount the possibility of Connoisseur acquiring AM's under the NAB plan if the circumstances were right.

Ownership regulation of broadcasting is needed because of the dearth of stations owned by minorities and women, said outgoing (see 1906250036) National Hispanic Media Coalition General Counsel Francella Ochillo on the panel with Warshaw. The FCC was “complicit” in excluding women and minorities from station ownership for decades, Ochillo said. The QR isn't just a time to find rules to eliminate, but to ask if rules are serving the public interest, she said.

Warshaw supports increased minority and female ownership, and said all radio owners are being hurt by the industry's loss of advertising share to digital. “If you want more money to come to minorities and women, have it be a stronger industry,” Warshaw said. “There is no equity capital for investment in radio, it's virtually impossible to raise money.” Arguments that radio doesn't face competition from digital companies, are “ridiculous,” he said. Tech companies such as Amazon and Apple are unregulated and don't even depend on advertising for their revenue, Warshaw said. “They have a completely different set of rules.”