Megaphone Envy and the Fairness Doctrine

"Freedom of the press belongs to the man who owns one."  A. J. Liebling

The way the leftists and liberals go on about conservative talk radio, what they call our "megaphones," one would suspect that they had a bad case of megaphone envy.  They make it sound that somehow conservatives and their capitalist lackeys have created a monopoly over the radio spectrum, cutting off and drowning out the left's political points of view that otherwise would surely prevail in the court of public opinion, if only the "People" had the chance to hear them.  However, the facts presented below suggest otherwise.  There is an active progressive radio network broadcasting today, even if a commercial version, Air America, failed to survive financially.

The premier owner of progressive radio stations in the US is the Pacifica Foundation.  Founded in 1949 in Berkeley, California with the explicit intent of spreading a pacifist message through radio broadcasting, today the organization holds Federal Communications Commission (FCC) licenses for powerful FM transmitters in the San Francisco Bay Area, Los Angeles, Houston, Washington, D.C. and New York City. In addition, they claim almost 150 affiliate stations that re-broadcast their content in other US markets.  Pacifica's programming leans heavily to the political, with titles like Women in Triumph and Struggle, La Raza Chronicles, Spirit in Action, Feminist Magazine, or, a syndicated favorite, "Democracy Now!" produced and hosted by Amy Goodman.

A reasonable analysis of the situation in the five metropolitan market areas with Pacifica transmitters shows that government licensure has offered Pacifica Foundation stations full technical equivalency to the local stations that carry the prototypical conservative talk show personality, Rush Limbaugh.  Below is a list of the Pacifica FM stations by market and the corresponding AM stations that carry Rush Limbaugh.  Each station's call letters links to a calculated coverage map on http://www.radio-locator.com/.  Note that the maps for the AM stations are for daytime coverage - this is Limbaugh's typical time slot.  FM coverage is pretty much the same day or night.

Metro Market


Pacifica


Limbaugh






San Francisco

4









Los Angeles

2









Houston

6









Washington, D.C.

9









New York City

1




*  A clear channel on AM

An inspection of the two maps in any specific market shows that the Pacifica licenses pretty much cover their metropolitan areas and hence the core population about as well as the Limbaugh stations.  The Limbaugh stations do have a bit further reach into the lower population density hinterlands, especially the two powerful clear channel AM stations, known to the industry as "blowtorches."   This is to some degree the result of a technological choice on the part of Pacifica Foundation. It opted  for the superior broadcast sound quality of FM. In addition, the FCC designated the lower part of the FM band as "non-commercial educational", giving non-commercial educational organizations (NCEs) like Pacifica preference in FM frequency allocation.

So who has the bigger, more powerful megaphone, as granted by the US Federal Communications Commission, at least in these five major metropolitan markets?  I'd call it a pretty much a wash but you can judge for yourself by comparing hyperlinked maps.

Of course, there is the little matter of money.  The conservative talk radio stations are all owned by profit-seeking, private commercial enterprises.  To listen to Limbaugh one must endure his paid commercial discussions of tank-less water heaters, identity theft services, credit card negotiators, and others. That's how the station owners cover the purchase price of the licenses, the electric bill, the studio and tower rents, transmitter maintenance, and Limbaugh's fees.  In addition they pay taxes.  They pay property taxes and employment taxes and inventory taxes, ad nauseum.  When they manage to make a profit, they pay income taxes too.  For example, the major radio player, Clear Channel Communications, in 2006 (before it went private and stopped filing 10K reports) paid over half a billion dollars in income taxes at a rate of almost 30% of net income.

On the other hand, Pacifica Foundation, as a recognized non-profit, made no profit and paid no income taxes.  In fact, Pacifica is subsidized by government.  For the last available IRS form 990 (roughly equivalent to an individual's Form 1040), in 2006, 11.8% of their "cash received" came from "government contributions (grants)."  As of this writing, Pacifica Foundation headquarters has not responded to repeated attempts at communication, so the nature or the sources of these funds have not been revealed.  Some or all of this might have been project work under contract to a government entity but under what terms and for what services, we don't know.

But that's just the direct payments.  As Professor Arthur Brooks, of Syracuse University, reminds us, the contributions of the listeners are indirectly subsidized by their ability to deduct charitable contributions from their taxable income.  While most would agree that having government not tax the income that we share with charitable non-profits is usually a worthy public policy, it remains an indirect subsidy.  For most of us this is a trivial personal matter but what about the $300,000 gift by "Annonymous #34" [sic] Pacifica received per their 2006 tax return?  Assuming the philanthropist lives in California and is in the highest tax brackets, that's probably over $100,000 the federal government didn't receive and $30,000 the state of California never saw.  Plus, given the highly political content broadcast over Pacifica stations, are they really a charitable organization?

Another matter is the value of the licenses that Pacifica Foundation holds as a gift from the federal government.  These are valuable pieces of paper, if not fully tangible property in the legal or accounting sense.  They are issued and re-issued by the FCC for terms of 6 years and grant exclusive local use of a 400 kilohertz slice of the electromagnetic spectrum to an FM broadcaster.  Barring malfeasance, public challenge, political interference, or gross disregard of FCC regulations, re-issuance is routine.  There is an active market in licenses although transfer requires prior FCC approval.  A public firm like Clear Channel Communications has to show the market value of the licenses on their books and "marks to market" the value ("impairment") every year, much like the accounting for goodwill.  They estimated the value of their licenses in 2006 as about $6 billion although they have since divested many stations and impaired the value of many more.

As a non-profit entity, Pacifica has neither to calculate nor report the value of its five licenses.  In a court dispute over control of Pacifica in 1999, the value of the Berkeley station alone was reported as $60 million.  That was probably too low at the time, and would more realistically be almost $150 million today according to professional radio station broker, Dave Garland, based on his knowledge of industry trends and recent market transactions.  Today, all five licenses could fetch upwards of $250,000,000 per Mr. Garland's estimation.  Yet, Pacifica need not report these holdings nor pay taxes on the appreciation.

So here is a progressive network of five stations, subsidized with taxpayer cash partially covering operating expenses, broadcasting over extremely valuable radio spectra in major US markets as a gift from the US government.  Seems like Pacifica Foundation has little basis for complaint about being stifled.  They have the means to get their message out.  All citizens have to do is turn their radios on, dial them in, and listen.  Do they?

Let's compare just how many citizens take the opportunity for progressive content against how many citizens chose the stations with conservative talk programming.  The dominant company in radio ratings is Arbitron, which uses a special device called a "Portable People Monitor" which is carried by randomly selected adults and teens on their persons.  It records the special inaudible signals embedded in audio stream by participating stations then uploads them to Arbitron via cell phones incorporated within the base stations supplied for nightly recharging.  It is still a relatively new technique but it seems more accurate than the hand-written diary methods used previously. 

Survey results are available to sophisticated marketing experts in a number of forms but for our purposes, a relative simple metric called "share" (page 38) tells the story.  Of all the time spent listening to radio in a market, what percentage of the total radio listening is to the rated station?  The standard parameters for this data are persons 12 and over, between the hours of 6 AM and 12 midnight, over the seven day week.  A station with a share of 2% gets twice as much of listening time (in people-hours) as a station with a 1% share.  Almost all stations participate.  In just the Washington D.C market, 9th size in the nation and the smallest with a Pacifica station, there are 43 competing stations dividing the 100% of the radio listening amongst them.

Here's a summary chart:

Metro Markets

Stations

Share (%)

Ratio

New York City

WABC-AM

4.3

43


WBAI-FM

0.1






Washington, D.C.

WMAL-AM

3.2

5


WPFW-FM

0.7






Houston

KTRH-AM

5.4

27


KPFT-FM

0.2






Los Angeles

KFI-AM

4.4

22


KPFK-FM

0.2






San Francisco

KSFO-AM

3.5

?


KPFA-FM

not rated






source: Arbitron PPM Ratings January, 2009




The conservative talk radio station is listed as the top entry in each market pair.  "Ratio" is how many times larger is the conservative talk station's audience than the Pacifica progressive station's audience.  Note that KPFA in Berkeley has yet to install the Arbitron encoder needed to be included in the ratings due to technical difficulties according to the station engineer I spoke with. There are 59 stations with Arbitron encoders competing for the audience's listening time in the San Francisco market.

The one Pacifica station that seems to be a competitive outlier is WPFW in Washington D.C.  It is listed as a "jazz" format and has more music compared to the other Pacifica stations with 11 of the 18 weekday hours of the survey devoted to music.  Of course, Washington is a company town and conservative talk radio is not exactly big-government friendly -- WMAL is relatively low rated amongst the conservative stations.

The facts show that progressive radio has more than a fair chance to reach a radio audience but listeners just aren't tuning in.  In New York City, hardly a bastion of knuckle-dragging rednecks, conservative talk radio is preferred 43 to 1.  Of course, Pacifica might not be the only progressive broadcaster in these markets but then there are  other conservative talk radio broadcasters who don't carry Rush Limbaugh.

I asked the Pacifica Foundation for their opinion on the Fairness Doctrine (or its offspring "localism") but no official position was forthcoming.  I did have a thoughtful exchange with one board member, Shawn O'Brien, a radio host on Pacifica's KPFK in Los Angeles, who was careful to present his opinions as his alone and not necessarily those of the Pacifica board.  He lamented that since the repeal of the Fairness Doctrine, "Pacifica has also become more partisan and far more doctrinaire, which is a real shame, as the original mission of the network was firmly in line with the intent of the Fairness Doctrine, in that, Pacifica wanted to present all viewpoints on the network."  He also held the view that "the MSM is so tilted to the right" (!) that Pacifica now has a niche to fill.  Yet he'd "re-instate the Fairness Doctrine in a heartbeat" if it was his to do.

With 50 FM frequencies, over 100 AM frequencies theoretically available to a listener, if only someone would only pay the costs of filling them, over 300 satellite channels, and an untold number of internet radio stations, one can ask, why does any one channel with a single set of managers and program developers have to overcome their own worldviews and strive for balance within that station's broadcasts? 

Scott Walton is the spokesman for KQED-FM in San Francisco, a relatively civil, well mannered, and polite NPR public radio station broadcasting with 110,000 watts.  He asserts: "Our organization strives to create balanced content and to present to our audience as complete a picture as possible."   In spite of sincere efforts on the part of KQED-FM to do so, most AT readers (and KPFA listeners) would disagree about "balanced content" after a few hours of listening.  It should be obvious that "balance" is in the ear of the auditor with no objective measure agreeable to all. In our courtrooms, no one person presents both the prosecution and the defense. Under the Fairness Doctrine, most broadcasters chose to avoid the balance test and refused to air controversial issues. Hasn't it always proved better for free speech to have many voices presenting their worldview as best they can? 

Ultimately, liberals and the left don't envy the size of conservatives' megaphones; they fear the power of conservative arguments.  More dangerously, they resent radio listeners' freedom to choose.

Joseph Somsel owns 9 vintage FM tuners and has three FM antennas on his roof.  He could pick up KPFA on any of them, if he so chooses.  He has appeared on KQED-FM, KSFO-AM, KINF-AM, and Fox Business Channel (cable TV).
"Freedom of the press belongs to the man who owns one."  A. J. Liebling

The way the leftists and liberals go on about conservative talk radio, what they call our "megaphones," one would suspect that they had a bad case of megaphone envy.  They make it sound that somehow conservatives and their capitalist lackeys have created a monopoly over the radio spectrum, cutting off and drowning out the left's political points of view that otherwise would surely prevail in the court of public opinion, if only the "People" had the chance to hear them.  However, the facts presented below suggest otherwise.  There is an active progressive radio network broadcasting today, even if a commercial version, Air America, failed to survive financially.

The premier owner of progressive radio stations in the US is the Pacifica Foundation.  Founded in 1949 in Berkeley, California with the explicit intent of spreading a pacifist message through radio broadcasting, today the organization holds Federal Communications Commission (FCC) licenses for powerful FM transmitters in the San Francisco Bay Area, Los Angeles, Houston, Washington, D.C. and New York City. In addition, they claim almost 150 affiliate stations that re-broadcast their content in other US markets.  Pacifica's programming leans heavily to the political, with titles like Women in Triumph and Struggle, La Raza Chronicles, Spirit in Action, Feminist Magazine, or, a syndicated favorite, "Democracy Now!" produced and hosted by Amy Goodman.

A reasonable analysis of the situation in the five metropolitan market areas with Pacifica transmitters shows that government licensure has offered Pacifica Foundation stations full technical equivalency to the local stations that carry the prototypical conservative talk show personality, Rush Limbaugh.  Below is a list of the Pacifica FM stations by market and the corresponding AM stations that carry Rush Limbaugh.  Each station's call letters links to a calculated coverage map on http://www.radio-locator.com/.  Note that the maps for the AM stations are for daytime coverage - this is Limbaugh's typical time slot.  FM coverage is pretty much the same day or night.

Metro Market


Pacifica


Limbaugh






San Francisco

4









Los Angeles

2









Houston

6









Washington, D.C.

9









New York City

1




*  A clear channel on AM

An inspection of the two maps in any specific market shows that the Pacifica licenses pretty much cover their metropolitan areas and hence the core population about as well as the Limbaugh stations.  The Limbaugh stations do have a bit further reach into the lower population density hinterlands, especially the two powerful clear channel AM stations, known to the industry as "blowtorches."   This is to some degree the result of a technological choice on the part of Pacifica Foundation. It opted  for the superior broadcast sound quality of FM. In addition, the FCC designated the lower part of the FM band as "non-commercial educational", giving non-commercial educational organizations (NCEs) like Pacifica preference in FM frequency allocation.

So who has the bigger, more powerful megaphone, as granted by the US Federal Communications Commission, at least in these five major metropolitan markets?  I'd call it a pretty much a wash but you can judge for yourself by comparing hyperlinked maps.

Of course, there is the little matter of money.  The conservative talk radio stations are all owned by profit-seeking, private commercial enterprises.  To listen to Limbaugh one must endure his paid commercial discussions of tank-less water heaters, identity theft services, credit card negotiators, and others. That's how the station owners cover the purchase price of the licenses, the electric bill, the studio and tower rents, transmitter maintenance, and Limbaugh's fees.  In addition they pay taxes.  They pay property taxes and employment taxes and inventory taxes, ad nauseum.  When they manage to make a profit, they pay income taxes too.  For example, the major radio player, Clear Channel Communications, in 2006 (before it went private and stopped filing 10K reports) paid over half a billion dollars in income taxes at a rate of almost 30% of net income.

On the other hand, Pacifica Foundation, as a recognized non-profit, made no profit and paid no income taxes.  In fact, Pacifica is subsidized by government.  For the last available IRS form 990 (roughly equivalent to an individual's Form 1040), in 2006, 11.8% of their "cash received" came from "government contributions (grants)."  As of this writing, Pacifica Foundation headquarters has not responded to repeated attempts at communication, so the nature or the sources of these funds have not been revealed.  Some or all of this might have been project work under contract to a government entity but under what terms and for what services, we don't know.

But that's just the direct payments.  As Professor Arthur Brooks, of Syracuse University, reminds us, the contributions of the listeners are indirectly subsidized by their ability to deduct charitable contributions from their taxable income.  While most would agree that having government not tax the income that we share with charitable non-profits is usually a worthy public policy, it remains an indirect subsidy.  For most of us this is a trivial personal matter but what about the $300,000 gift by "Annonymous #34" [sic] Pacifica received per their 2006 tax return?  Assuming the philanthropist lives in California and is in the highest tax brackets, that's probably over $100,000 the federal government didn't receive and $30,000 the state of California never saw.  Plus, given the highly political content broadcast over Pacifica stations, are they really a charitable organization?

Another matter is the value of the licenses that Pacifica Foundation holds as a gift from the federal government.  These are valuable pieces of paper, if not fully tangible property in the legal or accounting sense.  They are issued and re-issued by the FCC for terms of 6 years and grant exclusive local use of a 400 kilohertz slice of the electromagnetic spectrum to an FM broadcaster.  Barring malfeasance, public challenge, political interference, or gross disregard of FCC regulations, re-issuance is routine.  There is an active market in licenses although transfer requires prior FCC approval.  A public firm like Clear Channel Communications has to show the market value of the licenses on their books and "marks to market" the value ("impairment") every year, much like the accounting for goodwill.  They estimated the value of their licenses in 2006 as about $6 billion although they have since divested many stations and impaired the value of many more.

As a non-profit entity, Pacifica has neither to calculate nor report the value of its five licenses.  In a court dispute over control of Pacifica in 1999, the value of the Berkeley station alone was reported as $60 million.  That was probably too low at the time, and would more realistically be almost $150 million today according to professional radio station broker, Dave Garland, based on his knowledge of industry trends and recent market transactions.  Today, all five licenses could fetch upwards of $250,000,000 per Mr. Garland's estimation.  Yet, Pacifica need not report these holdings nor pay taxes on the appreciation.

So here is a progressive network of five stations, subsidized with taxpayer cash partially covering operating expenses, broadcasting over extremely valuable radio spectra in major US markets as a gift from the US government.  Seems like Pacifica Foundation has little basis for complaint about being stifled.  They have the means to get their message out.  All citizens have to do is turn their radios on, dial them in, and listen.  Do they?

Let's compare just how many citizens take the opportunity for progressive content against how many citizens chose the stations with conservative talk programming.  The dominant company in radio ratings is Arbitron, which uses a special device called a "Portable People Monitor" which is carried by randomly selected adults and teens on their persons.  It records the special inaudible signals embedded in audio stream by participating stations then uploads them to Arbitron via cell phones incorporated within the base stations supplied for nightly recharging.  It is still a relatively new technique but it seems more accurate than the hand-written diary methods used previously. 

Survey results are available to sophisticated marketing experts in a number of forms but for our purposes, a relative simple metric called "share" (page 38) tells the story.  Of all the time spent listening to radio in a market, what percentage of the total radio listening is to the rated station?  The standard parameters for this data are persons 12 and over, between the hours of 6 AM and 12 midnight, over the seven day week.  A station with a share of 2% gets twice as much of listening time (in people-hours) as a station with a 1% share.  Almost all stations participate.  In just the Washington D.C market, 9th size in the nation and the smallest with a Pacifica station, there are 43 competing stations dividing the 100% of the radio listening amongst them.

Here's a summary chart:

Metro Markets

Stations

Share (%)

Ratio

New York City

WABC-AM

4.3

43


WBAI-FM

0.1






Washington, D.C.

WMAL-AM

3.2

5


WPFW-FM

0.7






Houston

KTRH-AM

5.4

27


KPFT-FM

0.2






Los Angeles

KFI-AM

4.4

22


KPFK-FM

0.2






San Francisco

KSFO-AM

3.5

?


KPFA-FM

not rated






source: Arbitron PPM Ratings January, 2009




The conservative talk radio station is listed as the top entry in each market pair.  "Ratio" is how many times larger is the conservative talk station's audience than the Pacifica progressive station's audience.  Note that KPFA in Berkeley has yet to install the Arbitron encoder needed to be included in the ratings due to technical difficulties according to the station engineer I spoke with. There are 59 stations with Arbitron encoders competing for the audience's listening time in the San Francisco market.

The one Pacifica station that seems to be a competitive outlier is WPFW in Washington D.C.  It is listed as a "jazz" format and has more music compared to the other Pacifica stations with 11 of the 18 weekday hours of the survey devoted to music.  Of course, Washington is a company town and conservative talk radio is not exactly big-government friendly -- WMAL is relatively low rated amongst the conservative stations.

The facts show that progressive radio has more than a fair chance to reach a radio audience but listeners just aren't tuning in.  In New York City, hardly a bastion of knuckle-dragging rednecks, conservative talk radio is preferred 43 to 1.  Of course, Pacifica might not be the only progressive broadcaster in these markets but then there are  other conservative talk radio broadcasters who don't carry Rush Limbaugh.

I asked the Pacifica Foundation for their opinion on the Fairness Doctrine (or its offspring "localism") but no official position was forthcoming.  I did have a thoughtful exchange with one board member, Shawn O'Brien, a radio host on Pacifica's KPFK in Los Angeles, who was careful to present his opinions as his alone and not necessarily those of the Pacifica board.  He lamented that since the repeal of the Fairness Doctrine, "Pacifica has also become more partisan and far more doctrinaire, which is a real shame, as the original mission of the network was firmly in line with the intent of the Fairness Doctrine, in that, Pacifica wanted to present all viewpoints on the network."  He also held the view that "the MSM is so tilted to the right" (!) that Pacifica now has a niche to fill.  Yet he'd "re-instate the Fairness Doctrine in a heartbeat" if it was his to do.

With 50 FM frequencies, over 100 AM frequencies theoretically available to a listener, if only someone would only pay the costs of filling them, over 300 satellite channels, and an untold number of internet radio stations, one can ask, why does any one channel with a single set of managers and program developers have to overcome their own worldviews and strive for balance within that station's broadcasts? 

Scott Walton is the spokesman for KQED-FM in San Francisco, a relatively civil, well mannered, and polite NPR public radio station broadcasting with 110,000 watts.  He asserts: "Our organization strives to create balanced content and to present to our audience as complete a picture as possible."   In spite of sincere efforts on the part of KQED-FM to do so, most AT readers (and KPFA listeners) would disagree about "balanced content" after a few hours of listening.  It should be obvious that "balance" is in the ear of the auditor with no objective measure agreeable to all. In our courtrooms, no one person presents both the prosecution and the defense. Under the Fairness Doctrine, most broadcasters chose to avoid the balance test and refused to air controversial issues. Hasn't it always proved better for free speech to have many voices presenting their worldview as best they can? 

Ultimately, liberals and the left don't envy the size of conservatives' megaphones; they fear the power of conservative arguments.  More dangerously, they resent radio listeners' freedom to choose.

Joseph Somsel owns 9 vintage FM tuners and has three FM antennas on his roof.  He could pick up KPFA on any of them, if he so chooses.  He has appeared on KQED-FM, KSFO-AM, KINF-AM, and Fox Business Channel (cable TV).