JOHN THUNE
SOUlHDMOTA
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WASHINGTON. DC 20510-4105
July 26, 2011
The Honorable Julius Genachowski
Chainnan
Federal Communications Commission
44512~St, SW
Washington, D.C. 20515
Dear Chairman Gcnachowski:
COMMmEES
AGRICULTURE, NUTRITION & FORESTRY
BUDGET
COMMERCE. SCIENCE & TRANSPORTATION
FINANCE
http://thune.senate.gov
The Commission has before it a proceeding reviewing the comprehensive media ownership
rules. As you are aware, Section 202(h) of the Telecommunications Act of 1996 requires the
Commission to detennine periodically whether any of its media ownership rules "are necessary
in the public interest as a result of competition". My particular interest is within the
Commission's review ofthe radio rules under this standard.
While a strong argument can be made that the balance ofcompetition within the audio
marketplace has shifted more than cnough to compel the Commission to aggressively modernize
the local radio ownership rule, this letter serves to focus upon a glaring inconsistency within the
current rule - the AMIFM subcap. At a minimum, the subcap no longer reflects the realities of
today's radio marketplace, in tcnns ofeither technology or competitiveness. As a matter of
public policy, the subcap runs counter to one ofthe very goals the Commission seeks to promote
through its media ownership policies - diversity ofownership. And as a mattcr ofconsistency,
thc AM I FM subcap flics in the face ofother Commission media ownership rules.
From a technical standpoint, there should no longer be a distinction between the AM and FM
services. Digital tcchnology has revolutionized the programming capacity ofAM stations. In 
Band On-Channel (lBOC) technology allows AM stations to broadcast the same programming at
the same quality as analog FM stations. Today, there are 455 AM stations licensed using IBOC
technology. Further, the Commission recently permitted AM stations to employ FM translators
to fill in any signal deficiencies. In addition to these technological improvements in AM station
over-the-air signals, almost 2,000 AM stations now simulcast their signals over the Internet.
The current ownership rules also grossly undervalue the competitiveness of AM stations. In
terms ofmarket share, AM stations are strong competitors to their FM counterparts. A recent
study found that out of300 radio markets, 187 AM stations achieved a top-5 ranking in terms of
market share. To provide but a few examples, in the large market ofSan Francisco, 4 ofthe top
5 ranked stations were found on the AM band. In New York City, AM stations account for over
30% of market revenues. Similarly, in smaller markets like Medford, OR, Fargo, ND, and
others, AM stations garnered the top market share ranking.
32Q NORTH MAIN AVENUE
SUITE B
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RAPID CITY... SO 57701
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1
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ABERDEEN~SQ.~7401
(605)22~3
0956
While the Commission strives to promote diversity in broadcast ownership the AM / FM subcap
actually produces a chilling effect on ownership opportunities. Traditionally, AM stations are far
more affordable than their FM counterparts. Therefore, AM stations present a much easier path
to broadcast ownership for small business, especially those owned by women and minorities.
Should the AM / FM subcap be repealed, many current broadcast owners are likely to restructure
their radio holdings, freeing up a number ofincumbent AM stations for purchase. The result
would be greater opportunities for those who are essentially locked out ofthe market by the
current rules.
Beyond the technical and competitive realities of AM stations in today's market and the subcap's
suppression ofownership diversity, the Commission should repeal the AM / FM subcap as a
matter of consistency, The Commission only acknowledges the distinction between AM and FM
services in'the context oithe Local Radio Ownership Rule. However, in the Television / Radio
Cross-Ownership Rule and in the Newspaper / Broadcast Cross-Ownership Rule, no distinctions
are made between the AM and FM services. Since the Commission treats both AM and FM
stations as equals under other ownership rules, there is no reason AM and FM stations should be
treated differently under the local radio ownership rule.
Ifthe Commission does nothing else to modernize the local radio ownership rules during its
current ownership proceeding I strongly suggest that, at a minimum, the outdated AM / FM
subcap be repealed.
I appreciate your consideration, and look forward to hearing from you soon
JO THUNE
Unit d States Senator
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