Llew, that was actually part of NBC's problem. They refused to commit their AMs to NIS and move their existing AM music formats to FM, at a time when the audience was discovering FM as a more static-free music medium. But what the audience did not get was the idea of "all-news on FM", which is how NBC positioned it when running promos on their AMs.
This not only made the format fail in those markets -- including #1, New York City -- but sent a message to the industry that NBC wasn't fully behind NIS, which made a lot of stations hesitate to sign up. NBC had actually hoped for the main network affiliate to be the NIS station in each market as well, but that only happened in a small handful of cases.
The closest NIS stations to Los Angeles, in fact, were up in Ventura County and over in Palm Springs. Neither got a signal into L.A. itself. And this was at a time when NBC was affiliated with a 50kw AM (KTNQ) in L.A., which was fulfilling its network contract by running the top-of-hour news on delay on its FM, KGBS.
The one market where NIS did run on AM, Washington DC (on WRC), it was a great success in ratings and revenue.
I have wondered what would have happened if NBC had committed their AMs to NIS. I think that not only would the all-news network have survived, NBC would have found itself with a complement of very successful music FMs.