I have seen many articles heaping praise and laurels upon the LP license. I find it strange that many of these LP radio proponents don't know the sad and sordid tale of our first love affair with the Low power license, the Class D.
The FCC stopped issuing the FM Class D license in 1978. This license allowed schools to own and operate low power FM stations. Between 1978 and 2002 Low power licenses were only issued in Alaska. And as we all know the FCC has no jurisdiction in Alaska anyway. The need for this broadcast license was abated temporarily with the first (and only) wave of LP licenses.
Nifty article here: http://www.hamradio-online.com/library/fm2.html
In 1978 the class Ds were given the official directive "Grow or die" They had to file papers to turn up the power to 100 watts and qualify as a C license or face the inevitably encroaching protected contours of other stations. Often it was not possible for a station to crank up the juice due to other station on the first or second adjacent.
The Class D license was low power license, allowing a maximum of 10 watts output from the transmitter it could even occupy vacant commercial frequencies. The FCC essentially took the position that high-power stations serve the public interest better than low-power stations. They defend this notion with a simple RF over-crowding argument.
It goes like this: Suppose a Class A station covers a an area 500% greater than a Class D station. If a low-power station was using the same or adjacent frequency then the Class A station could not be able to operate due to spacing. Fewer people are served by the available bandwidth.
The flaw in this notion is that the FM Class D license was designed to fit between the high-power stations where no other class of license could be allowed. In the very unlikely chance that the above occurred, a Class D station, having no protected contour, would be forced to cease operation. The reasoning was wrong.
The reason the reasoning was wrong is that it was just a cover story. The real reason that the FCC yanked that license was that NAB, CPB and NPR pressured the crap out of them. As is typical in Washington, the party with the most money won. The only exception the FCC left standing were drive-in movie theaters.
A handful of original Class D's are still out there. Just recently in Philly WHHS was forced off the air by the move in of WSNJ (now WRNB.)