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The FCC Needs to Have Its Head Examined

The FCC’s  detailed explanation why it’s not allowing more deregulation is very specific about what radio is expected to deliver. In rejecting the NAB’s increased competitive environment, the FCC points out that Satellite Radio and Internet Radio are “national platforms,” not likely to respond to competitive conditions in local markets. And, no evidence was provided that either plan to become local. The FCC said, “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.”

This is a shockingly shallow view of technology and consumers from the FCC, which should know better.

The purpose of this post is not to speak to the wisdom of greater deregulation – it’s to speak to the way we think about the options facing consumers and the communities they live in nowadays.

What is the significance of a “national platform” when the tastes being satisfied are individual – not “local market” – ones?

While the FCC argues that “only local broadcasters provide programming based on the unique characteristics of their respective local markets,” that’s the wrong level of zoom. Zoom in closer and you find individuals – the folks who give rise to local markets – with individual characteristics, tastes, and interests.

The fact that Pandora is based in Oakland has nothing to do with its ability to match the tastes of an individual in Boise better than a local Boise radio station might. Local radio stations deal at the level of communities, but Pandora and platforms like it function at the level of the individual, which is inarguably more “local” than a “market.”

And if Pandora can muster a large number of listeners in Boise, package them together and sell them to a local auto dealer such that the auto dealer gets results for his investment and the listeners get more relevant ads, wouldn’t you call that impact “local”? And if it’s interesting enough to the public for that public to consume that platform’s content en masse, wouldn’t you call that “serving the public interest”?

Even SiriusXM, which for the vast majority of listeners can’t be personalized, provides more than a hundred listening options to individuals in any given local market. If I choose to listen to the Spa channel rather than my local Boise radio station, I’m making a personal, local decision which is cannibalizing other personal, local alternatives. And if enough people likewise do this in Boise, wouldn’t you call that, too, “serving the public interest”?

If tens of thousands of people make local decisions to listen to a platform that is not locally produced, exactly how does that make it anything but “local” in terms of its impact?

Does it extract local consumption? You bet it does.

Does it cannibalize local ad dollars? You bet it might.

“Competitive conditions in local markets” are conditions fundamentally wrought by consumers as individuals – individuals making individual choices regardless of the home base where those choices were created.

The FCC should see the marketplace as it is in 2014, not as it was in the 1920’s.

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