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Pols See Clear Case of Control - Broadcasting & Cable

Pols See Clear Case of Control

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Anger over big radio isn't likely to derail media deregulation, judging by comments of key Senators last week, but that is cold comfort to the pioneer of the big-band theory of ownership.

Reacting to growing criticism of radio giant Clear Channel in particular and media consolidation in general, several lawmakers at a Senate Commerce Committee hearing on radio ownership last week suggested that the problem might not be in the size of radio but rather the concentration of control of airplay, concert promotion and ticket sales.

That put the target squarely on Clear Channel, which is not only the nation's biggest station owner but its largest concert promoter.

Sen. Kay Bailey Hutchison (R-Texas) suggested Congress investigate allegations of pay-for-play, which requires music labels to compensate stations for airing their artists. "Should we be looking at the issue of payola separately from ownership?"

Clear Channel Chairman Lowry Mays, who testified at the hearing, denied that his company accepted payola or refused airplay to artists not under contract to its concert-promotion arm (although he admitted accepting pay from promoters who demand nothing in return).

In fact, he insisted that Clear Channel's 1,200-plus station group operates more like single stations than a media conglomerate. "We see ourselves as an aggregation of a number of small businesses throughout this country, serving local communities and playing what audiences want to hear."

Artists, public advocates, rival owners and even other media conglomerates nervous about the attention Clear Channel's muscle flexing has brought to deregulation, complain of a litany of perceived abuses by the company.

Clear Channel has been blamed for everything from the rise in concert-ticket prices to the homogenizing of radio formats. The company also is alleged to have parlayed its position as the No. 1 radio owner and top concert promoter to discriminate against unaffiliated musicians.

While investigation of specific abuses could put Clear Channel on the defensive, such a move would be less likely to obstruct the FCC's broad review of all media-ownership rules.

Less of a burden

Senate Commerce Committee Chairman John McCain (R-Ariz.) suggested that he still desires less burdensome rules. "I continue to believe anachronistic government regulations that don't reflect today's multimedia marketplace should be thoroughly reviewed by the FCC, repealed and modified where appropriate."

That sentiment was echoed by fellow Republicans Conrad Burns of Montana and John Ensign of Nevada.

Panel Democrats Ernest Hollings (N.C.), Byron Dorgan (N.D.) and Ron Wyden (Ore,) have protested deregulation and criticized the FCC's review but have little power to stop changes they don't like. The only specific calls to action came from lawmakers who aren't members of the committee but were asked to testify, Sen. Russ Feingold (D-Kan.) and Rep. Howard Berman (D-Calif.).

Feingold has introduced legislation that would ban pay-for-play and revoke licenses if stations with concert affiliates discriminate against artists. Berman complained that Justice has repeatedly ignored his calls to investigate Clear Channel and wants more pressure put on antitrust regulators.

A terse and testy McCain led off the hearing with a staccato burst of questions for Mays: Does Clear Channel have plans to obtain more radio stations? Should the government limit the number of stations one company can owns? Have stations been instructed not to air artists who don't use Clear Channel's concert-promotion business or who don't play at Clear Channel concert venues? Do employees sign affidavits stating they won't accept cash for airplay? Do Clear Channel stations replace local DJs with "voice-tracked" imports from other markets? Are competing radio stations permitted to advertise on Clear Channel's 770,000 billboards?

Mays denied any wrongdoing and said the company forbids payola. He insisted that Clear Channel doesn't discriminate against any artists and said rival stations are "good customers" for his billboard business.

Despite Mays' protestations, anecdotes of unfair play by Clear Channel were offered by critics asked to testify. Former Syracuse station owner Robert Short said he sold WRDS(FM) after Clear Channel launched a competing urban-formatted station. Clear Channel forced him out of the market, he told lawmakers, by packaging ad buys with its six other stations and essentially allowing advertisers to get free ad time on his rival. Despite excellent ratings, Short says he was unable remain profitable.

Rocker Don Henley said one of his manager's clients was unable to grant Clear Channel's request to participate in a promotional concert while she was wrapping up an album. Consequently, her single was ignored by Clear Channel stations, he said.

Mays countered that Henley's tale was "absolutely false."

McCain entertained

Later in the hearing, McCain tweaked Democrats Hollings and Berman for suggesting that Clear Channel's alleged abuses of market power should be investigated by Justice's antitrust division. "I'm entertained" by the suggestion, he said. "I hope that same approach will be used for other matters that concern members of the committee." Hollings and some other Democrats oppose a largely Republican effort to eliminate the FCC's authority to enforce ownership limits and put it instead under Justice.

Questioning NAB chief Eddie Fritts, McCain asked whether the association was hypocritical in supporting removal of national radio-ownership limits while fighting to retain the 35% cap on a company's TV-household reach.

Fritts' reply: "They are clearly two different mediums." In radio, consolidation has strengthened stations' finances and increased narrow formats, such as Hispanic stations, up 80% since the national cap was eliminated, he said. In television, networks have much more power to withhold programming and would have too much say over local broadcasters.

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