FCC Record, Volume 27, No. 1, Pages 1 to 936, January 3 - February 3, 2012 Page: 65
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8. Third, the prohibition on airing commercial advertisements that applies to LPFM
licensees restricts their ability to draw advertisers away from full-service commercial FM stations and
therefore to have an impact on the market for advertising. Although LPFM stations are permitted to
acknowledge contributions stemming from sponsorship or underwriting arrangements,'3 the legal
restriction on their ability to promote the products or services of their sponsors significantly reduces the
incentives of sponsors to replace commercial advertisement spots on full-service commercial FM stations
with underwriting announcements on LPFM stations.
9. We further find that differences between the programming of LPFM stations and full-
service commercial FM stations are likely to limit substitution between the two services. Listeners of
full-service commercial FM stations will switch to an LPFM station if they prefer its programming. A
station can affect the popularity of its programming in two ways: (1) through the choice of format, or (2)
through other investments, such as employing popular hosts, airing popular syndicated programming, and
researching the preferred programming of its target audience to determine the most popular programming
or songs.
10. Turning to the choice of format, we find that LPFM stations generally broadcast in
formats that are very different from those of full-service commercial FM stations. As discussed in
Appendix A. 1., 83.0 percent of full-service commercial FM stations specialize in a Music format,
compared to only 12.6 percent of LPFM stations. Further, LPFM stations are much more likely to have a
Religious format than full-service commercial FM stations (49.4 percent for LPFM stations versus 5.0
percent for full-service commercial FM stations), a Miscellaneous format (32.9 percent versus 1.4
percent), or a Variety format (28.2 percent versus 1.0 percent). These differences in format likely will
reduce the number of listeners LPFM stations will draw away from full-service commercial stations, and
thus reduce the competitive impact LPFM entry will have on full-service commercial stations.14
11. In addition, we believe that many LPFM stations likely will have incentives to choose
programming that is different from that provided by full-service commercial FM stations for two reasons.
First those LPFM stations that seek to provide a particular programming content consistent with their
interests are unlikely to set up and bring a station on the air if the programming already is available from
another local station. Second, LPFM stations will find it more difficult to obtain donations and
institutional support if they provide programming that is duplicative of programming already provided in
the market.
12. While we cannot directly compare the quality of LPFM and commercial FM stations"
programming, we note that LPFM stations' budgets are much smaller than those of full-service
commercial FM stations and that LPFM stations are thus less able to afford the most popular and
expensive syndicated programming and show hosts. Indeed, all but one of the stations in our case studies
that aired syndicated programming obtained it for free."
13. Finally, we note that our analysis finds ample support in the current listenership data we
have gathered in other parts of this Economic Study. Based on these data, it appears that LPFM stations
generally have a negligible impact on full-service commercial FM stations. Few have listenership high
enough to qualify for an Arbitron rating, and most have broad formats, compared to the more specialized
and focused formats of full-service commercial FM stations. As shown in Appendix A. 1., total
(Continued from previous page)
results of 2011 Prometheus survey of LPFM stations in which the average annual budget reported by respondents
was $19.402.50 and the median annual budget was $10,000).
13 47 C.F.R. 73.801. 73.503(d).
1 In addition, the offering of different formats by LPFM stations may enhance consumer welfare by providing
listeners with a greater variety of programming. It particularly will benefit listeners who prefer the formats offered
by LPFM stations in situations where those formats are not offered by other local radio stations.
is See Appendix A.2.65
Federal Communications Commission
DA 12-2
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FCC Record, Volume 27, No. 1, Pages 1 to 936, January 3 - February 3, 2012 (Book)
Biweekly, comprehensive compilation of decisions, reports, public notices, and other documents of the U.S. Federal Communications Commission.
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United States. Federal Communications Commission. FCC Record, Volume 27, No. 1, Pages 1 to 936, January 3 - February 3, 2012, book, February 2012; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc171091/m1/80/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.