Radio giants want more turfBiggest station groups say FCC deregulation of the industry didn't go far enough 4/07/2002 08:00:00 PM Eastern
Congress triggered massive radio consolidation when it removed national ownership limits and relaxed local-market restrictions in 1996. But, while activists and some policymakers voice concern about fallout from the merger explosion, the biggest station groups are, not surprisingly, singing a different tune.
Clear Channel, Infinity and Cox, which together own some 1,495 stations, to name just the three largest groups in terms of revenue, say the FCC didn't go far enough.
Using an ongoing FCC review of its local-radio-ownership rules as a launching pad, the country's top radio groups are asking the FCC to revamp its merger-review process to make it easier for the biggest owners to beef up their holdings in local markets.
The parent company of Infinity, the second-largest station group, is calling on the FCC to get out of the merger-review process entirely. "Repeal of the commission's local-ownership regulation will not have any adverse impact on listeners," Viacom officials said two weeks ago in comments filed with the FCC.
The FCC is considering a rewrite of local-ownership restrictions, including its four-year-old policy of "flagging" radio mergers for extra scrutiny when they create significant concentration of ad revenue. Also under the microscope is the way the commission measures the number of stations in a market. It has suggested replacing a complex formula based on the number of overlapping signals in a station's coverage area with Arbitron's standard market definition.
Critics of the FCC's market-measurement policy say two different FCC measuring sticks used by the FCC often allow owners to get around local-ownership limits by overcounting the number of stations in a market or undercounting the number of stations one company owns.
Although revamping measurement procedures was a project of former commission Democrats Susan Ness and Gloria Tristani, current Chairman and Republican Michael Powell has pledged to "fix the problem" if current practices create higher levels of local ownership concentration than Congress intended.
The prospect of tighter merger rules apparently alarms the big groups.
"Many smaller radio markets generate insufficient advertising revenues to support more than two viable competitive groups," Cumulus officials argued, "and permitting greater levels of consolidation will often generate more-diverse and better-quality programming."
The big owners are lauding the increased diversity of programming formats while playing down the loss of other types of programming diversity, including the disparate voices of minority, female and smaller business owners, say critics of consolidation. "Ownership diversity should be promoted" through the FCC's public-interest authority to impose merger conditions and divestitures, said American Women in Radio and Television.
Taking the hardest line against consolidation is the American Federation of Television and Radio Artists, which charged that industry giant Clear Channel may have "forever transformed and destroyed" the radio and recording industries. For instance, local and independent musicians are finding it nearly impossible to break onto the airwaves in the many markets dominated by Clear Channel's 1,200 stations because the company relies on a "cookie-cutter" national playlist, according to the union for on-air talent, producers and writers.
|Pro and con|
|For Weaker Rules|
|What They Want|
|Eliminate flagging and reject new market measurements that reduce number of stations company can own in most markets|
|Eliminate flagging. Base merger reviews only on numerical limits|
|Deny requests that LMAs and time-brokerage deals receive pre-approval|
|Include non-radio advertising in ad test. Grandfather existing groups if rules are tightened|
|Repeal all local limits|
|For Stronger Rules|
|National Association of Black Owned Broadcasters|
|What They Want|
|Reduce number of stations|
|company can own in most markets|
|Give ethnics, gender, diversity parity with format diversity in reviewing mergers. Revive tax credits|
|Investigate Clear Channel, others for anti-competitive practices.|
|Require divestitures at time of merger approval. Reinstate tax credits|