Thanks to Translator-Mongering, AM Broadcasters Now Openly Advocating Band's Abandonment

It’s still more than two months away, but in late November Americans will sit down with their families/friends and gorge themselves on food, then satedly lounge around giving thanks for their bounty. The U.S. radio industry’s going through that process presently, having spent most of the year scarfing up and then trading around FM translator stations.
In quick summary: FM translators are a class of radio station limited to a broadcast power of 250 watts but unlimited in antenna height (the key factor for good FM coverage). They are considered secondary services, in that they must rebroadcast another radio station. For decades, translators have been used as stand-in broadcast nodes by interests who wanted to build out radio networks on the cheap — by and large, these have been religious and public broadcasters who pipe in programming via satellite to air on a translator. Translators don’t require any staff and since they don’t originate their own programming all they need is a shack for the RF-boxes and a tower nearby.
This all began to change last decade when, after a multi-year freeze on new translator stations in order to implement the LPFM radio service, the FCC opened a filing window for new translators in 2003. Several cunning parties were well-prepared for this opportunity, flooding the agency with tens of thousands of translator applications — a 250-watt FM spectrum gold rush. Out of these came thousands of new translator stations, which in the intervening years have been fodder for speculative development of the FM dial around the country.
Two changes in FCC translator policy exacerbated these practices: the first allowed full-power FM stations that had adopted the U.S. HD Radio digital broadcast protocol to simulcast supplementary digital programming on translator stations, treating them as stand-alone “new” analog broadcast outlets. Since translators are secondary services, this allowed broadcast companies who had maxed out the number of full-power stations they could buy in any given market to circumvent the FCC’s radio ownership rules at will.
The second change was made in the name of “AM revitalization.” It’s no secret that the AM band has been plagued for many years by rising interference levels, coming from a plethora of electronics and wireless communication devices — and even from HD-related sideband noise. For several years now, the FCC has been conducting a rulemaking to explore ways by which to give AM broadcasters some “relief”; the most popular proposal was to allow AM stations to acquire their own FM translators.
Earlier this year, the FCC opened up an opportunity to allow AM stations access to translators. This happened in two parts: the first filing window, between January and July, gave the most disadvantaged AM stations first bite at the translator apple. The second window is open now through October, and allows any AM station to acquire a translator, provided they meet minimal qualifications. These windows allow for trade in existing translators or construction permits already acquired to build them; next year, another auction window will open for new translator applications, also exclusive to AM broadcasters.
Tens of millions of dollars have changed hands as speculators who acquired translator stations and applications to build them began plying their wares. At its inception — as is the case with many fundamental transformations in broadcast policy in the U.S. – AM broadcasters downplayed all of this this as a “supplementary” effort that would allow AM stations to maximize their listenership, ratings, and revenues, putting them on a more “even playing field” with their FM bretheren.
In the first translator-for-AM window, more than 600 translator-acquisition filings were tendered to the FCC, representing some $23 million in transactions. In just the first month of the second translator-window (which allows stronger AM stations in major markets to make plays), nearly 100 translator-sales have taken place valued at nearly $7 million.
Some notable transactions include Beasley Media Group’s acquisition of an FM translator in Las Vegas for $700,000, which it will site on the highest point in the city — effectively giving Beasley an “extra” FM station in that market which will ostensibly simulcast its AM talk-outlet…at least for the next few years, after which FCC rules will allow the translator to be repurposed. Another big-ticket buy came from Cumulus Media, the second-largest broadcast conglomerate in the country, which spent $425,000 to purchase an FM translator in small-market New Mexico with designs to move it into Albuquerque to serve its news/talk AM station there, at least in the short-term.
(These are not the first six-figure translator-sales we’ve seen over the last several years: some translators have even sold for millions, particularly in the NYC and Chicago markets.)
I’ve been saying for a long time now that this entire new market for spectrum has nothing to do with “saving” AM, but rather giving AM broadcasters a relatively low-cost mechanism by which to migrate to FM, which will eventually become the only viable radio broadcast band. Two recent data-points make this quite plain.
The first involves the flip-style sale of an AM station in Alabama. Spectrum-speculator Shelby Broadcast Associates acquired the license to silent AM station WNZZ in Montgomery from Cumulus in late August/early September. The price: $55,000. Cleverly, Shelby paired the AM station, which is only licensed to broadcast with 1,000 watts during the day and 45 watts at night, with an FM translator it acquired back in May for $35,000. Bundling the two together allowed Shelby to turn around and sell the pair within a week of closing on WNZZ for $215,000 — a cool $125,000 profit for doing nothing except trading some pieces of paper that give permission to broadcast.
The second data-point involves the very candid words of Mark Bohach, owner of WLOH-AM in Lancaster, Ohio. He scarfed up two FM translators for his beleagured (500 watts day/16 watts night) AM signal. In one of Tom Taylor’s industry newsletters last week, Bohach pulled no punches about what he hopes to see happen to AM stations that acquire FM translators.
“We have shifted our marketing, logos and imaging to reflect the FM frequencies only,” wrote Bohach. “What I believe needs to happen is two-fold: First, my FM translators need to be afforded primary license status so they are fully protected from encroachment. Second, I should be allowed to sunset 1320 AM and permanently shut it down, after a period of notification to listeners. 90 days’ notice would work well.”
Broadcasters who are playing the FM translator market are now confident enough to pull back the curtain and admit that none of these maneuverings have been about “relief” or “revitalization” of the AM band – it’s all about maximizing business opportunities on the FM dial. This is a continuation of the philosophy I articulated last week about broadcasters playing footsy with stock markets: let’s protect our slice of spectrum and, if we can, let’s do anything we can to leverage it for lucre.
If supply/demand trends continue, although it’s quite likely that the second translator-trading window now underway will not result in as many sales as we saw in the first, since bigger stations are buyers now it’s possible that the amount of money these deals will bring in will rival the hundreds of deals done with AM’s small-fry. And then when the auction opens for new FM translators in 2017 — considered by many to be the last chance to get in on this market — the dollar-figures involved could be unprecedented. Quick bucks will again beat public service…but the industry gave up on the latter long ago.