The major issue is that it is not based in statute other than an incomplete reading of Section 5 of the LCRA.
On the LCRA issue, it does state that LPFM and FM translators must remain "equal in status", which has been interpreted in the past by the FCC as secondary vs. primary. It does not mean that LPFM and FM translators have not be equal in technical configuration.
The massive hole is where it comes to fair distribution. See §307(b) of the Communications Act:
In considering applications for licenses, and modifications and renewals thereof, when and insofar as there is demand for the same, the Commission shall make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same.
§307(b) has been long interpreted to require that full-service stations must provide service to a specific community and that distribution of licenses must be fair and equitable. For community coverage, the FCC uses the following guidelines to determine if the designated community of license is covered:
- For non-reserved band FM (commercial and noncommercial), the community of license must be within 70 dBu service contour (the FCC prefers 100% coverage, but gives a tolerance for around 85%). Communities are determined through a table of allotments, which must be amended for any changes (the table in §73.202 only shows the vacant allotments).
- For noncommercial reserved band FM, at least 50% of the community of license must be within the 60 dBu service contour.
- For AM, the community of license must be within the 5 mV/m daytime contour. (Subsequent modifications are allowed to already licensed stations to reduce to 50% of the same community of license, but new stations and community of license changes must encompass 100%).
Any community of license change within any of the full-services requires a showing of how the change will result in a preferential arrangement of allotments. The FCC bases this on population of the community of license and a priority system which takes into consideration the number of allotments/stations that already serve the community. The policy is very unfavorable to removing the only licensed service to a specific community (even in cases where stations from other communities may also provide coverage over that community).
Surrendering the AM license will create a major §307(b) issue because it will create many situations where communities will lose their sole broadcast service (AM and FM considered together). Not all AM translators are operating in their community of license. In fact, many are operating in other communities where there is a greater advantage to do so because of the market (for example, an AM station just outside of an urban area places a translator in the urban area engineered in a manner where the 60 dBu of the translator contour is just inside the 25 mile radius around the AM station and the translator provides 0% 60 dBu coverage to the AM community of license. In this case, it would cause that AM community of license to lose an aural service and a primary aural service is added to a community that is already well served. This goes completely against Congress' mandate for fair distribution.
Let's not also forget that a FM translator, or an LPFM station at either LP100 or LP250 for that matter, may not even be capable of providing a 60 dBu service contour to 50% of the community of license.
In the full-service rules, there are specific requirements for what is considered a community for allotment purposes. LPFM and translators do not have this requirement.
For smaller rural towns where the AM station's translator does provide a 60 dBu over most of the service contour of that same community, then there may be a chance for a §307(b) justification. However, another thing to consider is that the replacement could be a lower service quality since FM translators are allowed to come inside of interfering contours and that translator is prone to interference. With some rarer exceptions, full-service (FM and daytime AM) stations must provide interference protection both ways (it cannot interfere nor can be interfered with).
Such a concept is dead in the water as it does not even address how fair distribution and loss of community coverage will be addressed. This is an act of Congress and cannot be "waived" by the FCC.
The other main problem with this concept where existing translators are grandfathered to their current facilities but newer (and I am assuming modified) "FM translator only AM" facilities must meet the translator technical rules, I am assuming that you are referring to the non-fill in rules of §74.1235? If this is the case, then you may need to create multiple service classes because of the variation of how these rules apply throughout the country as well as the free-for-all that takes place where fill-in translators are involved. I do not see how these facilities can be easily integrated into the FM allotment system where distance separation is used between allotments.
In the non-reserved band FM world, the FCC assigns a full-service allotment first to the community. This means that a reference point is used in the community, usually the location of the post office or a restricted allotment any reference point that meets the distance separation but can still provide a 70 dBu contour (based on a flat earth circle) over most or all of the proposed community of license.
Also, we must consider the bilateral international agreements with Canada and Mexico and the massive amounts of renegotiation that will need to take place to make this work.
The concept is statutorily unsound and would result in the loss of first and second aural services in many communities in favor of providing additional inferior primary services in already well-served communities. This is not only not in the public interest, but it would severely violate Congress' expectations of fair and equitable distribution of licenses, pursuant to §307(b).