FEBRUARY 02, 1999

Pirates in Suits?
by Katy Bachman

FCC's backing of microradio may cause confusion on the airwaves

Last year, the Federal Communications Commission crowed about the 250
pirate radio stations it shut down. Last week, the Democrat-controlled
Commission moved to legitimize the impulse for community radio by
establishing thousands of low power FM (LPFM) stations, commonly referred
to as "microradio."

Last Thursday's 4 to 1 vote to adopt a Notice of Proposed Rulemaking
opens up an already heated industry discussion over a proposal to change
FCC rules and allow a system of as many as 4,000 low-power radio stations.
The vote put in motion an indefinite period of time during which the FCC
will receive comments from all parts of the industry.

Microradio has been a pet project of FCC Chairman William Kennard of
late. Though most broadcasters are up in arms--the National Association of
Broadcasters has vocally condemned the concept--Kennard came up with
microradio as a panacea to consolidation a year ago. "We have an
obligation to explore ways to open the doors of opportunity to use the
airwaves, particularly as consolidation closes those doors for new
entrants," said Kennard to broadcasters at last October's NAB convention
in Seattle. Kennard sees a microradio system as a way for churches,
schools, universities, minorities and other community groups to have a
voice on the airwaves.

"Good intention, bad idea," responds Dick Ferguson, vp/COO, Cox Radio and
NAB Board chairman. "I'm not opposed to [Kennard's] underlying desire to
see people have access. But they're playing with the laws of physics. We
find it bewildering that you can jam all these stations and not interfere
with the existing system."

Interference was the main reason Republican commissioner Harold
Furchtgott-Roth, who has consistently and openly criticized the FCC for
trying to undo Congress' passage of the Telecommunications Act of 1996,
cast the lone negative vote. In his dissenting statement, Furchtgott-Roth
said he was troubled that certain signals would be "loosened," causing "a
severe incursion on the rights of current licenseholders."

The FCC reassured the industry in last Thursday's open meeting that
there would be "interference protection criteria" to prevent lower power
radio stations from interfering with existing stations or with the radio
industry's ability to move to digital broadcasting (known as in-band
on-channel or IBOC).

Broadcasters aren't buying it. According to IBOC developer USA Digital
Radio's one-inch thick petition for establishing a digital radio broadcast
standard, 60 percent of FM stations already experience some sort of
interference from other stations close to them on the dial. "This proposal
threatens the transition to IBOC digital radio, will likely cause
devastating interference to existing broadcasters, and will challenge the
FCC as guardian of the spectrum," said Edward Fritts, NAB president/CEO.

Markets are already over-radioed, say broadcasters, as a result of
another FCC action in the mid 1980s, known as Docket 80-90, which dumped
more than 2,000 additional radio signals into the spectrum. Microradio
would exacerbate that, noted the NAB. "There are now nearly 12,500 radio
stations--3,500 of which have been added since 1980."

So who gets to have a voice? Plenty of special interest groups--13,000 of
them by the FCC's own count--might like to get their hands on a radio
signal, but they may not all be the ones Kennard has in mind. "While many
proponents of this rulemaking see it as a means of increasing broadcast
ownership by minorities and women, there is in all likelihood no
constitutionally sound way to assure such a result," said Furchtgott-Roth.

Broadcasters, who remember the days before the Telecom Act when more
than half the stations in the U.S. lost money, are scratching their
heads. "I don't get it," said Larry Wilson, chairman/CEO, Citadel.

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