Commission Document

PUBLIC NOTICE

Federal Communications Commission

News Media Information 202 / 418-0500

445 12th St., S.W.

Internet: http://www.fcc.gov

Washington, D.C. 20554

TTY: 1-888-835-5322

DA 11-756

Released: May 10, 2011

MEDIA BUREAU SEEKS COMMENT ON THE ECONOMIC IMPACT OF

LOW-POWER FM STATIONS ON FULL-SERVICE COMMERCIAL FM STATIONS

MB Docket No. 11-83

Comments Due: June 24, 2011

Reply Comments Due: July 25, 2011

The Local Community Radio Act of 2010 ("LCRA"),1 enacted on January 4, 2011,
relaxed certain restrictions on low-power FM ("LPFM") stations in order to facilitate the growth
of LPFM service.2 In addition, Section 8 of the LCRA requires the Commission to "conduct an
economic study on the impact that low-power FM stations will have on full-service commercial
FM stations" and to provide a report to Congress on that study within one year of the LCRA's


1 Local Community Radio Act of 2010, Pub. L. No. 111-371, 124 Stat. 4072 (2011).
2 For example, the statute requires the Commission to modify its rules in order to eliminate third-adjacent minimum
distance separation requirements between LPFM stations and full-service FM stations, FM translator stations, and
FM booster stations. LCRA 3(a). See 47 C.F.R. 73.807. The LCRA also permits the Commission to grant
LPFM stations waivers of the second-adjacent channel distance separation requirements in certain circumstances.
LCRA 3(b)(2). The statute further mandates that the Commission take certain factors into account when licensing
LPFM stations, FM translator stations, and FM booster stations. Id. 5.
The Commission created the LPFM service in 2000 to "provide opportunities for new voices to be heard" and to
"enhance locally focused community-oriented radio broadcasting." Creation of Low Power Radio Service, Report
and Order, 15 FCC Rcd 2205, 2206-2208, 1, 3 (2000). LPFM stations operate on a noncommercial educational
basis at a maximum power of either 100 watts or 10 watts, depending on their class. Their coverage generally
extends three to five miles. Unless the purpose of the licensing entity is public safety, only one LPFM license may
be granted per entity, and licensees may not hold attributable interests in any other regulated media entity, including
broadcast stations. Id. at 2206, 1; 47 C.F.R. 73.811, 73.853(a), 73.855. According to Commission data, 859
LPFM stations were licensed nationwide as of the end of 2010. Broadcast Station Totals as of December 31, 2010,
FCC News Release (Feb. 11, 2011).

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enactment.3 In connection with the preparation of the study and report, we seek public comment
on the requirements of Section 8 and on the ways in which LPFM stations may have an
economic impact on full-service commercial FM radio.
As a preliminary matter, we seek public comment on the appropriate subject matter and
scope of the study and report Congress has requested. In particular, the LCRA directs the
Commission to study the economic impact that LPFM stations "will have" on full-service
commercial FM stations.4 Based on this use of the future tense and the changes to LPFM service
mandated by the LCRA, our preliminary reading of Section 8 is that Congress intended for the
Commission to assess any economic impact that LPFM stations may have on full-service FM
stations after the statute has been implemented. However, our analysis necessarily must be based
on data currently available for existing LPFM stations. We seek comment on whether the LCRA
requires the Commission to include in its report predictive judgments about potential impacts
that will occur after the statute is fully implemented and additional LPFM stations are licensed
pursuant to the LCRA. We also seek comment on how we should account for any limitations
involved in making predictive judgments based on currently available data.
In addition, we request input on the metrics we should take into account in our economic
study and report to Congress. In order to assess any "economic" impact that LPFM stations may
have on full-service commercial FM stations, our initial view is that there are two metrics we
should take into consideration: (1) changes in audience ratings of full-service FM stations
attributable to competition from LPFM stations and (2) changes in the advertising revenues of
full-service FM stations attributable to the existence of LPFM stations. Full-service commercial
FM stations derive the vast majority of their earnings from advertising, which in turn is a
function of their listenership. Accordingly, we believe that audience ratings and advertising
revenues are the most relevant available indicators for evaluating changes in a commercial
station's economic performance.
Each of these metrics is discussed in more detail below. We ask commenters to address
our preliminary views about the factors relevant to the study and report Congress requested, to
discuss the relative importance or usefulness of the factors we have identified, and to suggest
other factors we should consider. We also invite commenters to identify relevant resources or
data for evaluating these factors and to provide any evidence or information that will inform our
review. In addition, we request that commenters provide input on the proper geographic areas to
be analyzed for purposes of our study as well as our preliminary conclusion, discussed below,
that we need not address interference issues in the study.

Audience Ratings: We invite commenters to provide evidence that LPFM stations have
had, or are likely to have after the LCRA's implementation, a direct or indirect impact on the
audience ratings of full-service commercial FM stations. Given that LPFM stations generally
target niche audiences and have small coverage areas in comparison to full-service stations, to


3 LCRA 8. Because Congress refers to "full-power" radio stations as "full-service" stations in the LCRA, we also
use that terminology in this Public Notice. Id.
4 Id.
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what extent do they compete for listeners with full-service commercial stations? Has any such
competition had a measurable effect on the audience shares of full-service stations? To the
extent that there is available data showing recent changes in the audience ratings of full-service
FM stations, what is the best means to discern what portion of such changes, if any, is
attributable to competition from LPFM stations, and not a result of unrelated economic
conditions? Aside from local audience measurements provided by Arbitron Inc. ("Arbitron"),5
are there any other sources we should examine? Approximately 54 percent of existing LPFM
stations are not located in Arbitron "Metro" markets.6 Is there any way to measure the effect of
such LPFM stations on the audience ratings of full-service FM stations?
Advertising Revenues: We seek comment on the extent to which LPFM stations have
had, or are likely to have after the LCRA's implementation, a direct or indirect impact on the
advertising revenues of full-service commercial FM stations. LPFM stations are prohibited from
airing commercial advertisements and therefore are prohibited from directly competing for
advertising.7 However, we seek comment on whether sponsorship and underwriting of LPFM
stations siphon advertising dollars away from full-service stations and on whether LPFM stations
impact the advertising revenues of full-service stations in any other respect.8 What are the
primary sources of funding for most LPFM stations, and what percentage of their funding
typically derives from underwriting arrangements? Has the level of underwriting increased
substantially among LPFM stations since the service was authorized in 2000? Is there any way
to discern from aggregated data what portion, if any, of changes in the advertising revenues of
full-service commercial FM stations is attributable to competition from LPFM stations, and not a
result of unrelated economic conditions? Are the databases maintained by BIA/Kelsey the best
sources for tracking radio advertising revenues? Are there any other sources we should
examine?
Relevant Geographic Measures: With respect to the metrics discussed above and any
others that we may consider, we also seek comment on the appropriate geographic areas to be
evaluated for purposes of our economic study. Our current plan is to use two different
geographic measures in our study. First, we intend to examine the economic effect of LPFM
stations on full-service commercial FM stations with signal contours that either significantly
overlap or encompass one or more LPFM stations. There is the greatest potential for direct


5 Arbitron currently has designated 282 different local geographic markets, or "Metros," each of which is a
geographical area in which a cluster of stations serve a unique population that local businesses/advertisers seek to
reach. Arbitron Metros generally correspond to Metropolitan Statistical Areas as defined by the Office of
Management and Budget. Where Arbitron Metros differ from Metropolitan Statistical Areas, Arbitron has
determined that listening patterns and economic interdependence indicates a different market definition is
appropriate for radio advertising and programming purposes. Currently, about 60 percent of all U.S. commercial
radio stations are licensed to communities within Arbitron Metros, and approximately 85 percent of the U.S.
population resides in these markets.
6 BIA Financial Network Inc., BIA/Kelsey Media Access Pro Radio Analyzer Database, April 23, 2011.
7 47 C.F.R. 73.853(a).
8 See 47 C.F.R. 73.801, 73.503(d).
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economic competition between LPFM stations and full-service commercial FM stations in areas
in which there is such coverage overlap. Second, we plan to evaluate the economic impact of
LPFM stations on full-service commercial FM stations based on geographic markets as defined
by Arbitron. Specifically, we will attempt to determine whether full-service commercial FM
stations experience any economic effects due to the presence of one or more LPFM stations in
the same Arbitron market, regardless of whether there is contour overlap between the full-service
station and any LPFM stations. We seek comment on the advantages and disadvantages of each
of these proposed measures and on any other approaches we should consider. With respect to
the Arbitron market-based approach in particular, we seek comment on the limitations that it
may present due to the fact that a large percentage of LPFM stations are not located in Arbitron
markets.
Interference Remediation Issues: We currently do not intend to study potential
interference issues in connection with our report to Congress. Our preliminary interpretation of
the statute is that Congress did not intend the Commission's study or report to assess the
potential economic impact on full-service stations due to interference from LPFM stations.
Section 8 of the LCRA does not expressly require such an assessment. Moreover, Congress
adequately protected against interference problems by including in the LCRA extensive
measures designed to resolve any interference from LPFM stations on third-adjacent channels.9
The statute also requires the Commission within one business day of receiving a complaint of
interference from an LPFM station operating on a second-adjacent channel to notify the station
to suspend operations immediately until the problem is resolved.10
We believe our interpretation also is supported by the history of LPFM service. Congress
required the Commission in legislation passed in 2000 to hire an independent engineering firm to
study potential interference to full-service FM stations from LPFM stations operating on third-
adjacent channels.11 The subsequent engineering study conducted by The MITRE Corporation
and released by the Commission in 2003 (the "MITRE Report") concluded that LPFM third-
adjacent channel minimum distance separation requirements could be eliminated, subject to
certain stipulations, without creating an interference risk for full-service stations.12 In contrast to
the specific directive in the 2000 legislation requiring the Commission to analyze potential
interference caused by LPFM stations, Section 8 of the LCRA does not expressly obligate the
Commission to analyze or assess interference issues. Because of this difference in the two
statutes, combined with the interference protections included in the LCRA and the conclusions of


9 LCRA 7.
10 Id. 3(b)(2)(B).
11 United States Public Laws, Pub. L. No. 106-553, 114 Stat. 2762 (2000); see also S. REP. NO. 111-160, at 1-3
(2010); H.R. REP. NO. 111-375, at 4-5 (2009).
12 Experimental Measurements of the Third-Adjacent Channel Impacts of Low-Power FM Stations, The MITRE
Corp. (May 2003) at xxvi-xxvii, 2-16 to 2-18, 5-1 to 5-4. The MITRE Report found an interference potential in
certain limited circumstances, particularly to FM translators, unless recommended technical requirements are met.
Id. The LCRA instructs the Commission to address the potential interference that the MITRE Report predicted to
FM translator input signals. LCRA 6.
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the MITRE Report, we do not anticipate an economic impact on full-service stations due to
interference from LPFM stations.13 We seek comment on our view that we need not analyze
interference issues in connection with the economic study and report required under Section 8 of
the LCRA.
Other Issues: We seek comment on whether there are any other potential economic
effects that LPFM stations have, or may have after the LCRA's implementation, on full-service
commercial FM stations. With regard to any such factors, commenters should provide specific
and detailed information. We also offer commenters this opportunity to discuss any other issues
we should consider in connection with the economic study and report to Congress required under
Section 8 of the LCRA.

PROCEDURAL MATTERS

Ex Parte Rules. This proceeding will be treated as a "permit-but-disclose" proceeding
subject to the "permit-but-disclose" requirements under Section 1.1206(b) of the Commission's
Rules.14 Ex parte presentations are permissible if disclosed in accordance with Commission
Rules, except during the Sunshine Agenda period when presentations, ex parte or otherwise, are
generally prohibited. Persons making oral ex parte presentations are reminded that a
memorandum summarizing a presentation must contain a summary of the substance of the
presentation and not merely a listing of the subjects discussed. More than a one- or two-sentence
description of the views and arguments presented is generally required.15 Additional rules
pertaining to oral and written presentations are set forth in Section 1.1206(b).
Comments and Reply Comments. Interested parties may file comments and reply
comments on or before the dates indicated on the first page of this document.16 Comments may
be filed using: (1) the Commission's Electronic Comment Filing System ("ECFS"); (2) the
Federal Government's eRulemaking Portal; or (3) by filing paper copies.17
Electronic Filers: Comments may be filed electronically using the Internet by accessing
the ECFS: http://fjallfoss.fcc.gov/ecfs, or the Federal eRulemaking Portal:
http://www.regulations.gov. Filers should follow the instructions provided on the
websites for submitting comments. For ECFS filers, if multiple docket or rulemaking


13 See MITRE Report at 5-5 (concluding that interference from LPFM stations operating on third-adjacent channels
occurred too infrequently to warrant the expense of performing an economic analysis of their potential interference
to full-service FM stations).
14 47 C.F.R. 1.1206(b), as revised.
15 Id. 1.1206(b)(2).
16 Id. 1.415, 1.419.
17 See Electronic Filing of Documents in Rulemaking Proceedings, Memorandum Opinion and Order, 63 Fed. Reg.
24121 (1998).
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numbers appear in the caption of this proceeding, filers must transmit one electronic copy
of the comments for each docket or rulemaking number referenced in the caption. In
completing the transmittal screen, filers should include their full name, U.S. Postal
Service mailing address, and the applicable docket or rulemaking number. Parties may
also submit an electronic comment by Internet e-mail. To get filing instructions for e-
mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include
the following words in the body of the message, "get form." A sample form and
directions will be sent in response.

Paper Filers: Parties who choose to file by paper must file an original and four copies of
each filing. Filings should include the applicable docket or rulemaking number. If more
than one docket or rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or
by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the
Commission's Secretary, Marlene H. Dortch, Office of the Secretary, Federal
Communications Commission.
o All hand-delivered or messenger-delivered paper filings for the Commission's
Secretary must be delivered to FCC Headquarters at 445 12th Street, S.W., Room
TW-A325, Washington, DC 20554. All hand deliveries must be held together
with rubber bands or fasteners. Any envelopes must be disposed of before
entering the building. The filing hours at this location are 8:00 a.m. to 7:00 p.m.
o Commercial overnight mail (other than U.S. Postal Service Express Mail and
Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD
20743.
o U.S. Postal Service first-class mail, Express Mail, and Priority Mail should be
addressed to 445 12th Street, S.W., Washington, DC 20554.
Accessibility Information. To request materials in alternate formats (Braille, large print,
electronic files, audio format, etc.) for people with disabilities, send an e-mail to
fcc504@fcc.gov, or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice),
202-418-0432 (TTY).
Additional Information. For additional information, contact Martha Heller,
Martha.Heller@fcc.gov, or Julie Salovaara, Julie.Salovaara@fcc.gov, of the Media Bureau,
Industry Analysis Division, (202) 418-2330. Press inquiries should be directed to Janice Wise,
(202) 418-8165, of the Media Bureau.
By the Chief, Media Bureau
-FCC-
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