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More On Radio. Extending the Conversation: The Telecommunications Act of 1996 Clear Channel Radio. Review. Communications Act of 1934 Set up the FCC (no longer FRC) Radio stations promised to give time for educational/religious/etc. programming

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More On Radio

Extending the Conversation:

The Telecommunications Act of 1996

Clear Channel Radio


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Review

  • Communications Act of 1934

    • Set up the FCC (no longer FRC)

    • Radio stations promised to give time for educational/religious/etc. programming

      • Lower end of FM dial later reserved for non-commercial radio (1941)

    • Set ambiguous guidelines on indecency:

      • “No person...shall utter any obscene, indecent or profane language by means of radio communication.“

    • Radio still for the common good of all people.


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Telecommunications Act of 1996

  • What were its intended goals?

    • To produce more competition, more diversity of viewpoints, lower prices for consumers, and more wealth and jobs for the economy.

    • Over 10 yrs supposed to save consumers $550 billion, including $333 billion in lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in lower cable bills.

    • Supposed to create 1.4 million jobs and increase the nation’s GDP by as much as $2 trillion.

    • Consolidation would supposedly boost the radio industry’s profitability (was losing money)


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Telecommunications Act of 1996

“[I]t is a great day. It will

be competition. It will give

the American consumer

greater choice. ... It is the

greatest jobs bill we are likely

to pass in this decade.”

— Rep. Thomas Bliley, (R-VA),

chair of the House Energy

and Commerce Committee

February 1, 1996


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How passage of the act proceeded

  • Made without consulting and/or informing the public

  • Special interest group lobbying & corporate donations issues

  • Made with 1.5 hours of discussion

    • (Congress was railroaded – no one read it!)

  • Couldn’t foresee dramatic changes and advances in the industry


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What the 1996 TC act changed:

  • Lifted the limit on how many radio stations one company could own

    • 1 company could now own as many as 8 stations in the nation’s largest local markets, up from a local limit of 4 per market

  • Lifted from 12 the number of local TV stations any one corporation could own, and expanded the limit on audience reach.

    • 1 company had been allowed to own stations that reached up to 1/4 of U.S. TV households. The Act raised that national cap to 35 percent.


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What the 1996 TC act changed: (cont)

  • Deregulated cable rates

  • Permitted the FCC to ease cable-broadcast cross-ownership rules

  • Gave broadcasters (free) digital TV licenses

  • Extended the term of a broadcast license from five to eight years


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Consequences of the TC Act of 1996

  • HUGE media mergers & increased concentration

  • Less Diversity

  • Higher Prices

    The first week after the act became a law, $700 million worth of buying & selling took place.


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TV-Related Consequences

  • Network Television

    • Less than 6 companies control 75% of prime-time viewing

  • Cable Television

    • Deregulated cable rates increased prices by 50%

    • 90% of top 50 cable stations are owned by same parent companies that own broadcast networks


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Radio Consequences

  • Radio

    • Leads to media mergers, conglomerations, and monopolies.

    • Does not increase competition; dramatically shrinks it.

    • Issues with diverse voices in radio

    • Issues w/community safety


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Radio Consequences

  • Affected minority radio ownership

    • Minority ownership declined 14%

  • Significantly reduced local ownership

    • Can’t compete with huge corporations


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Radio Jobs / Radio News

  • Supposed to ad 1.5 million jobs

    • Half a million overall jobs lost in telecommunications

    • 10,000 jobs lost in radio

  • News is more profit driven – less $ devoted to it

    • News is no longer local

    • Radio news staff shrinking

    • 4 companies control news format stations


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Licensing

  • Longer licensing – 8 years

    • Less accountabilty

  • More difficult for revocation


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Technology & Music/Related Issues

  • US lags behind in technology

  • More difficult to get airtime

  • Concert ticket prices rise dramatically


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It Isn’t All That Bad

  • Universal Service Fund

    • Subsidizes telecommunications access

    • V-Chip mandates


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The Bottom Line

  • “The Telecommunications act of 1996 needs to be updated to reflect current technology so the competitive market the Act originally sought can be realized.”


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Radio EMPIRES

  • Clear Channel Owns:

    • More than 1,200 radio stations

      • Reaches 100 million listeners daily

      • Operates more than 240 radio stations in Australia, Mexico & New Zealand.

      • 17 million listeners weekly / 2,000 employees

    • 40 TV stations in 25 markets

      • Affiliated w/7 networks & 2 Independents

      • Full service news departments operate in 24 markets including 2 in Spanish Language


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Nation’s concert promoter

2002: sold 30 mil tkts

Owns 44 amphitheatres

Owns 51 theatres

Owns NUMEROUS clubs & arenas

Owns 775,000 billboards

From their website:

“Clear Channel is the #1 “out of home” media company in the world. From the time people leave their homes in the morning until 7pm at night no other company in the world reaches more people than Clear Channel.”

Clear Channel


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How Big is Clear Channel?

  • Bought SFX promotions in 2000 (+226,000 events/yr)

  • Clear Channel Satellite

  • Clear Channel Wireless (high speed internet)

  • “Inside Radio” – industry trade pub.

  • Katz Media Group – ad firm in NYC

    • 2100 radio stations / 350 TV stations / 1,700 cable stations

  • Motor Sports Group

    • 600 car/cycle racing events each year


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…still going

  • Premiere Radio Networks

    • Rush Limbaugh (7,800 stations)

  • Prophet Systems

  • SFX Sports Group

    • Talent mgmt/marketing agency (500 athletes)

  • Produces TV

  • Satellite “XM”

  • Owns Touring Rights to Broadway productions

  • Owns theatres on Broadway and in Chicago

  • http://129.79.148.32/cc/CCradioForm.html


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What CC says about this:

  • “We’re not in the business of providing news and information. We’re not in the business of providing well-researched music. We’re simply in the business of selling customers products.”

    • Clear Channel CEO Lowry Mays


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Consequences of the Process

  • No one can compete

  • Without competition, can do whatever they want.

  • Rock and Roll the Corporate American Way?


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Interesting Relationships

  • “Patriotic Rallies”

    • Yeah, right.

  • Close ties w/the current administration


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