The Difference Between Non-commercial and Commercial FM Broadcasting
FM radio offers a unique opportunity for businesses & ministries today. Most people new to radio are confused
by the differences between non-commercial and commercial radio. If you wonder which type offers the best
opportunities for you, we invite you to read on.
Differences between Non-Commercial
and Commercial Radio
Commercial is generally very easy for people
to understand. Commercial Radio sells advertising
using a sales force, charges promotional fees, and
involves itself in many ways of profit making business.
Most people do not realize that Non-commercial
FM stations are very similar in practice except
that all of their income is turned back into the
corporation for station growth, upgrades, repairs,
salaries, etc. so that the station will never realize a
profit. All income is re-invested into the corporation.
Non -comms differ from commercial FM stations
primarily in that they are not permitted to accept revenue
in exchange for broadcasting "spots" (announcements
advertising goods and services), yet
they may charge for broadcasting programs. The licensee
of a non-commercial educational FM station
is expected to provide a broadcast schedule that is
"non-commercial". Remember, the Congress ordered
the FCC to find a way to reserve some channels
in the new FM service for educational, instructional,
and cultural purposes. The method chosen
by the FCC requires that an applicant for one of the
reserved channels form a non-profit that is educational
The History and Development
of the FM Spectrum:
In the 1940's Congress watched with concern as schools, colleges, and universities were driven from the AM radio band in
the early days of radio. As a result, Congress ordered the Federal
Communications Commission (FCC) to implement a policy which
would allow educational broadcasters, and commercial broadcasters
to establish themselves without competing for channels on the
newly created FM band. The FCC responded by reserving the first
twenty channels (88.1 through 91.9 Mhz) of the FM band for
There was much enthusiasm for the new medium. How-ever,
with the outbreak of World War II development of FM was
halted. After the war, television became the dominant medium, and
AM began its period of decline. Interest in FM diminished and development
all but ceased.
With the 1960's came a renewed interest in FM broadcasting.
The AM broadcast band had become saturated, and the FCC
adopted standards for FM stereophonic sound, and thus began a
period of rapid growth that continues today.
Like its predecessor, AM radio, the FM radio band is filling
up. What is unique, is that while FM radio is enjoying a period of
tremendous growth and commercial success; opportunities for frequencies
exist because channels were "reserved" for applicants
who will offer educational, instructional, and cultural programming.
By including these programs in their schedules, schools, churches,
and other non-profit groups are establishing FM stations in ever
increasing numbers. And thanks to a ruling in the early 80's called
"Docket 80-90", commercial channels that were unavailable prior
to the ruling, are now able to be utilized.
The opportunity for establishing a FM radio station, in-creased
by the Docket 80-90 rules of the 80's, and now again in the
late 90's with the new Low Power FM proposal substantially raise
the number of FM radio channels available.
Non-profit Advertising Allowed -The reduction
of federal subsidies to Non-Commercial Educational
stations has resulted in significant reductions in the
funds available to establish new stations and for the
operation of existing stations. The FCC, recognizing the financial difficulties that existing non-commercial
stations were facing, has liberalized its rules regarding
the broadcast of announcements and programs for non-comms.
Presently, non-commercial educational stations
may accept advertising for goods and services pro-vided
by non-profit organizations. As well, they may
receive underwriting and sponsorship spots from national
and local businesses to pay for programming. Stations may accept donations from members of the general
public and from businesses. Individual donors may be
identified by their name, address and a description of their
products and services. An example of the extent of this liberalization
may be seen by viewing any non-commercial educational
"public television" station.
Non-commercial educational FM stations operated
by churches, schools, and organizations interested in educational
formats, have benefited from the FCC policy
changes. Local businesses are now potential sources
of revenue, and the station can now provide a useful
promotional service in return. Programs produced by
others may be broadcast, and the cost of airing the
programs may be charged to the entity supplying the
Examples of Non-Comm. Advertising:
"The following programming is sponsored by ...., home of
the..., located at....."
"Funding provided by ..."
"This hour of music was made available by The Univ. of ...,
The Robert Jones Singers will be appearing in concert at
the Univ. of .... on Sat. night, April 15 at 8 pm. Admission is
$10. For reservations please call ...."
"We appreciate the contributions of ....."
"The sponsor of our program offers additional helps by inviting
you to attend ...."
"The Little Theatre downtown is putting on a series of two
act plays featuring the work of Mary Beth Mather. For time
and ticket info. please call ....."
"Our local Coca Cola Bottling Company sponsors this hour
of programming and is also the host of this years THREE
STATE/ THREE MOUNTAIN CHALLENGE."
When choosing between a non-commercial channel or
commercial channel it's important to determine which
will best suit your purposes.
Let's review the differences & similarities:
- Non-commercial educational stations cannot accept compensation
for advertising in the manner commercial stations
- Non-commercial educational stations must include educational,
instructional, and cultural programming in their
schedules. Generally one percent of the total program schedule
is acceptable to the FCC.
- Local businesses are now potential sources of revenue
for non-comm stations, and the station can now provide a
useful promotional service in return.
- Programs produced by others may be broadcast, and
the cost of airing the programs may be charged to the entity
supplying the program.
- Unlike commercial FM channels, there is less competition
for non-commercial educational FM channels. There
are, therefore, fewer instances when a FCC hearing is required
to determine a winner among competing applicants.
- Though non-commercial educational FM channels comprise
only twenty percent of available channels, there are
generally more opportunities for new stations. This is be-cause
ownership is restricted to non-profit educational
- Both may broadcast the same type of news, sports,
weather, and music programming.
- A non-commercial educational FM station will have the
same coverage as its commercial counterpart with comparable
- Both may generate income through the broadcast of announcements
- Equipment, staffing, and operating requirements are essentially
Which to Choose? What then should be your choice? Non-commercial educational
or commercial? If you are interested in owning a FM
radio station, it doesn't make much difference. You can be
successful with either. The choice is more often determined
by the type of the available channel.
Commercial FM channels are governed by a table of assignments,
by which the FCC allocates channels for individual
communities. These channels are then auctioned to the highest bidding Applicant. Non-commercial channels are awarded based on a points system from the "Comparative
Hearing Standard" such as local ownership, ownership integrated into management, minority ownership, coverage, etc.
When you contact Sterling about owning a FM radio station, we help you make decisions concerning these many
which must be considered. We will check the FCC table of assignments to see if an unused and already assigned
channel could serve your purpose. If the answer is no, a computerized FM Frequency Search is necessary to determine
whether there is any available channel which could be used. Please review our FM
searches for more information.
If you need the FREE
Adobe Acrobat Reader to view our downloads, click here.