Saturday, Aug 30, 2008
The sorry state of the radio industry today is sabotaging FCC chairman Michael Powell's plans to let media conglomerates run wild.
Feb 19, 2003 | Clear Channel Communications, the radio and concert conglomerate so many people love to hate, has a new batch of disgruntled critics to deal with. But this time it's not the musicians who claim that the entertainment giant plays hardball and locks acts off the airwaves, or the broadcast rivals who allege the company leverages its unmatched size to drive competitors out of business, or even the former employees who insist the company's rampant cost-cutting style has gutted American radio.
Nope -- now the heat is coming from other media company executives and Beltway lobbyists. They are dismayed that Clear Channel is doing what many might have thought impossible. In an era when Republicans control the government and big business generally gets what it wants, Clear Channel is making deregulation look bad.
Executives at television, cable and newspaper companies want the government to lift ownership caps that limit the number of properties their companies can own. They've been envious of radio ever since the 1996 Telecommunications Act singled out radio for sweeping ownership deregulation. Passage of the Telecom Act paved the way for Clear Channel to expand from 40 stations to 1,225, and in the process, exert unprecedented control over the industry.
Today, broadcast, cable and newspaper giants like Viacom, Comcast and Gannett want a chance to expand their empires and enjoy the same large-scale efficiencies that Clear Channel has profited from. But they're frustrated. After years of intensive lobbying and with a Federal Communications Commission chairman, Michael Powell, who is widely considered to be thoroughly pro-deregulation, the havoc wrought upon radio by Clear Channel is unexpectedly offering ample proof of what can go wrong with media deregulation. Radio's current mess is having a significant impact on the debate over media concentration, and may even force Powell to water down his long-awaited ownership recommendations.
This is not how it was supposed to work.
"Media deregulation would appear to be slam dunk," says Mark O'Brien, executive vice president of BIA Financial, an investment firm specializing in broadcasting and telecommunications. "You've got a Republican administration, Powell supports it, and radio's already done it. On the other hand, it's because radio has done it, and particularly what Clear Channel has done, that puts pressure on Powell. Opponents point to Clear Channel and say, 'Here's what we don't want to happen to the rest of the media.'"
As Sen. Ron Wyden, D-Ore., recently put it, "The country ought to be pretty reluctant to repeat the radio [deregulation] experiment."
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