Could proposed limits on AM/FM move-ins create rural spectrum ghettos?

My colleague Davina Sashkin blogged recently about the changes which have been proposed in the AM/FM allocations process. The FCC’s idea is to reduce opportunities for new and existing stations to be “moved in” toward larger metropolitan areas. The Commission is concerned that, as a result of such move-ins, smaller, rural communities/areas are losing local service. So the Commission is proposing essentially to halt the move-in process. From comments elsewhere in the proposal, it’s clear that the Commission hopes that its various changes in allocation policies – along with other changes in the reporting of broadcast ownership – are also going to help increase the number of minorities and women in the ranks of broadcast owners.

But we’ve been hearing grumbling among some minority representatives who are not at all happy about the proposed limitations in the allocations area.

It’s not that they’re not grateful for any effort to help minorities get into the industry. It’s more that they see that effort as leading them down a dead end street. If the new allocation rules really are supposed to make new channels more easily available to minorities, that’s fine with them – but not if the channels that would become available to them are going to be stuck permanently in small “rural” communities. What good is it to be allowed to get into the ownership end of the business if the opportunities being opened for them are low-end/dead-end stations? Why should they be forever restricted to providing small market local service and reaping slim rewards while other broadcasters, in the big cities, are allowed to play in a very different financial league.

The folks we’ve heard from don’t expect any guarantee of commercial success. But they also don’t want to be subject to artificial regulations that would prevent them from seeking such success. And owning a station that can’t possibly be moved out of Two-Buck-A-Spot-Ville and over to Three-Figures-A-Minute City is just that situation.

The fear – and it’s not at all irrational – is that the No New Move-Ins approach may create a universe of second class stations with permanently limited profit potential, a kind of spectrum ghetto. And to that the folks we’ve heard from are naturally inclined to say thanks but no thanks.

As the Commission gives further thought to its new approach to allocations, it may want to focus on the fact that broadcasting is a business, and broadcasters – regardless of their race, gender or whatever – generally want to be able to compete on a level playing field. A strong case could be made for the view that the FCC’s current proposal would not provide such a field.