The Myth of Media Deregulation

What the Senators won't ask Clear Channel


In the public eye, the media behemoth called Clear Channel represents radio consolidation the way Rolling Rock represents cheap-but-drinkable beer. It owns over 1,200 stations, holds about 60% of the rock radio audience, and this Thursday will see its CEO grilled before the Senate Commerce Committee, which plans to hold hearings on concentrated ownership in the radio industry on that day.

Why the hearings? Because concentrated media ownership has come in for increased criticism lately, even as Congress and the Federal Communications Commission are expected to repeal several more rules restricting media consolidation. We're seeing a war between the devotees of two phrases, "the public interest" and "deregulation," and in this political environment, the deregulationists are expected to win.

In politics, "the public interest" is generally recognized as a code phrase for "what I want." It is less widely understood that the word "deregulation" can be another obfuscation, aimed at persuading a different set of onlookers. Many rules governing media have been loosened or repealed in the last 30 years, and this can, if the picture is framed appropriately, be presented as a deregulation of the media. Remove the frame, and it becomes obvious not only that new regulations have arrived as the old ones disappeared, but that they've often been backed by the same forces who present themselves as the boosters of deregulation.

In the past five years alone, an emerging alternative to mainstream radio—Internet broadcasting—was nearly smothered by new rules imposed not by the FCC, but by the Copyright Office. Some last-minute legislation softened the injury, but still left many Netcasters with legitimate complaints. Meanwhile, the large music and movie companies have not only declared legal war on any means of online distribution that they can't control, but have attempted to impose strict new regulations on the devices we use to consume their products—a probably futile attempt to keep the next Napster from emerging, and one that would restrict our ability to use those devices in convenient ways.

By dividing the spectrum into strictly zoned segments—AM here, shortwave there, cell phones over there—the FCC has slowed the rollout of the third generation (or "3G") systems that are supposedly going to bring us the long-promised wireless Internet. Meanwhile, a more promising alternative to 3G—Wireless Fidelity (WiFi), a device for local area wireless networks—has been hampered even more, because it requires not new FCC licenses but greater permission to operate without any licenses at all.

There are legitimate questions, mind you, as to whether WiFi and similar systems will work as well as their boosters hope. In a deregulatory world, that would mean that the technology would be given more leeway to experiment, to progress, to succeed, and perhaps to fail, not that it would have to wait for the FCC's approval before deploying itself. If WiFi does work as advertised, it promises a world in which Internet-delivered media are available almost everywhere, without a high bill or a long power cord, at broadband quality.

While Internet broadcasting faces these hurdles, would-be non-Internet broadcasters face even bigger challenges. The one significant new class of broadcast licenses—low-power FM—has been severely restricted by congressional action. There are more far-ranging proposals to remove the legal entry barriers new broadcasters face, but they have virtually no political capital behind them.

What do all these battles have in common? They all involve either new regulations or new problems caused by an old regulatory structure. And they all have the effect of reducing our media choices—put another way, of reducing our alternatives to Clear Channel.

When Clear Channel CEO Lowry Mays appears before the Senate Commerce Committee on January 30, he will be asked about many things. Chances are low, though, that a politician will raise any of the above issues, even though each of them is related, sometimes intimately, to media consolidation.