In my mind it seems to defy what AM radio has always represented. The again, I remember university where the Campus Security radios required relaying to get from one end of campus to the other with their screaming .25W radios.
This is very interesting although in today's environment I doubt it will ever be used beyond the current road information and such. I had previously done some research on the subject due to my fond memories of the college radio station we had at New Mexico State in the early 1970's. At the time the only popular music station in Las Cruces was a rather mediocre top 40 AM station that went off the air at sundown. Radio from El Paso was difficult to receive without an outdoor antenna.
In the dormitories and near some of the common use buildings the college station was broadcast on 660 AM. They played a mix of current top 40 and album rock that would have been found on FM in larger cities at the time. It was on this station that I heard David Bowie for the first time as well as many other great artist of the era. I had been told that there was a small AM transmitter in each of the buildings but now believe it was probably a closed circuit broadcast through the electric lines.
By the time I returned to Graduate School in the 1980's the station had moved to low power FM where it is still on the air today as KRUX 91.5. In the early 70's the call letters for 660 AM were given as KRWG-AM in coordination with the campus TV and full power NPR FM stations. I believe at one time 660 was referred to as KNMS for New Mexico State and have found the below link indicating that it had been named KNMA in the early 1960's. I suspect these closed circuit stations could use any call letters they wished. Carrier_current
I believe what you may be referring to is called "part 15" broadcasting. That means that your transmitter is FCC accepted and you follow the rules for size of antenna, amount of AM ground radials, and other factors. Similar to the travel stations, these are VERY low power, but properly done can have a decent (small) range. These kind of stations can be processed just like a "real" AM, and require no license. However...NOT following the FCC regs can get the opertor in serious trouble, so if you get involved, do it right! Do the proper engineering, and enjoy! I'm pretty sure Scott G. of this site used to have or know someone who did have a part-15 setup. College stations of days gone by used to be what are called, "Carrier current" stations where the signal was pumped in to the AC line for radiating through campus dorms and other buildings, and...could be received in cars and portables under or near the AC lines on campus. Those are also unlicensed operations. Not as popular now that LPFMs have been legally available to non profit organizations like colleges.
I've had considerable experience using a low power Part 15 AM station that was set up for relaying information to those attending practice POD (Point of Distribution) drills. It would be set on an AM frequency of 1640 KHz which is vacant in our area. A repeating message would inform people coming into the facility where to park, what paperwork to have ready, etc. Road signs were posted at the entrance to the POD site informing folks to tune their radio to 1640 AM for further info.
Using the FCC regulations' legal antenna size limit (3m) and output power (100 mW) the maximum range was about a 350 foot radius. This can vary with location though. Note that the antenna length stipulated in the regs includes the feedline length so the best situation was to have the antenna as close to the xmitter as possible. The unit I used was a commercially-built one ("The Talking Sign"), and a common one found in the second-hand market is known as the "Talking House" radio.
Next step up from these would be those Emergency Alert-type radios, using higher power, usually 10 watts, requiring an FCC license. If you tune from 1610 - 1700 using a decent receiver and antenna you might hear some in your area. More commonly they are used along highways for traveling motorists and notification signage along the highways alert drivers to specific frequencies that are in use.