Well I agree with moving the little stations off AM but in most markets there's no space on FM for them either. Basically there are just too many stations trying to cut a shrinking pie- not only do they have to compete with each other, but now with satellite radio, iPods, internet podcasts, and soon WiFi-radios.
The big concern now is how few young people even listen to radio anymore- they'd rather hear the music of their choice on iPods or such. How can radio compete with that? Radio listeners are getting older and poorer and advertisers are leaving radio and going to the internet where the young and affluence crowd is. And as ad revenue drops less is spent on staff, programming and equipment so service deteriorates even more. It's a vicious cycle.