Sunday, September 21, 2003

Government rethinking deregulation of radio

The Associated Press

Just seven years after deregulating the radio industry, the government appears to be having some second thoughts.

The Federal Communications Commission recently approved rules imposing tighter restrictions on radio ownership, citing concerns that some companies have gotten too big; and Sen. John McCain, R-Ariz., has proposed expanding those rules so they apply to stations a company already owns.

John Dunbar, telecommunications director at the Center for Public Integrity, said much of the pressure comes from concern about how radio deregulation played out following the Telecommunications Act of 1996.

The bill allowed Clear Channel Communications Inc., now the No. 1 owner of U.S. radio stations in the country, to grow from 43 radio stations in 1995 to more than 1,200 this year.

Clear Channel wasn't the only company to benefit from the deregulation. Cumulus Media's broadcasting division owns 270 stations, while Viacom Inc.'s Infinity Broadcasting owns more than 180 radio stations.

Many of the Infinity stations are located in the 50 largest radio markets in the United States, however, making them especially lucrative and high-profile.

Clear Channel says deregulation has improved the financial health and diversity of the industry, because companies that own multiple stations in one market have to come up with different formats to attract new listeners.

John Hogan, the radio division's chief executive, said it would be unfair to punish Clear Channel for playing by the rules by making the new rules apply retroactively.

Dunbar disagrees that deregulation has benefited radio, but questioned the usefulness of new tighter ownership rules that don't force companies like Clear Channel to sell some of their stations.

"It gives them a government-sanctioned competitive advantage in these markets they already have a stranglehold on because ... no one's going to be able to challenge them," Dunbar said.

"The government created the environment as it exists. They should have changed the rules a long time ago."

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