McRadio? Clear Channel owns the most stations in the country

Dec 1, 2003

The term “clear channel” refers to the dominant station on a particular AM radio frequency. A high-power, wide-service-area clear channel station takes priority, and other stations must use directional antennas or reduce power to avoid stepping on that station’s signal. The term also refers to the company that dominates the radio industry — and defines the debate over the future of radio. 

Clear Channel Communications Inc. owns more radio stations than any other company in the country. Critics argue such concentration threatens to tune out local voices and reduce diversity in programming.

The San Antonio-based company is not the only one fueling fears of corporatization of the radio industry. For that matter, the radio industry is not the only industry that has experienced consolidation. But critics accuse Clear Channel, in particular, of monopolizing and homogenizing the airwaves. 

Clear Channel is taking heat for centralizing programming choices in both music and news. Music programming, for instance, is governed by corporate-approved playlists. And broadcasts sometimes are recorded in one location and exported to other locations. This has community radio activists nostalgic for the days when programming was designed and produced in the neighborhood — for the neighborhood.It’s difficult, though, to quantify whether corporate-owned radio 

stations satisfy local needs. One prominent study indicates most people are happy with radio programming. A study released in February by Arbitron Inc., a marketing research firm that specializes in studying radio audiences, concludes that nearly 75 percent of radio listeners think their local stations do a “very good” or “good” job of playing music they like. 

Arbitron also reports that almost 80 percent of the respondents say they listen to local radio stations for information on news, weather, traffic, sports and community activities at least once a week, and that 85 percent say radio stations play an important role in providing such information.

Still, demand for such alternative outlets as Internet and satellite radio, technology that’s still evolving, is on the rise. As is support for low-power FM stations, which are operated by churches and other community groups. The Federal Communications Commission sanctioned these tiny, noncommercial stations three years ago. They are designed to transmit educational and other local programming.

The group leading the campaign for community radio has a highly charged name, too. The Prometheus Radio Project, named after the titan in Greek mythology who stole fire from the gods for the benefit of mortals, is composed of low-power FM activists. The Philadelphia-based advocacy group conducts “radio barnraisings” — activists build entire stations — in various locations around the country.

Low-power FM radio evolved from “pirate” radio. Some of these small stations still choose to operate illegally without a license. In fact, this state’s capital is considered the birthplace of these operations. Mbanna Kantako has broadcast “Human Rights Radio” from his Springfield home on and off since 1987. The FCC has confronted him several times. And after U.S. marshals confiscated his equipment during a raid in late 2000, he broadcast a tape of the event. The feds alleged his broadcast at 106.5 interfered with communications between pilots and air traffic controllers at Capital Airport. Such communications typically take place at the upper end of the frequency spectrum. Kantako’s record with federal prosecutors ended in March 2001 when U.S. District Judge Jeanne Scott enjoined him from sending radio transmissions without a license.

But government officials have felt increasing public pressure to open the airwaves to small local stations. In 2000, William Kennard, then-chairman of the FCC, championed licensure of low-power FM to counterbalance the consolidation that followed the Telecommunications Act of 1996.

“As more and more stations did the national play type of thing,” says FCC spokesman David Fiske, “the idea of somebody serving a particular community within a very small area that might do more high school football or local public boards or whatever ... there seemed to be a need for it.”

Congress bowed to the pressures of broadcasters by effectively limiting the number of frequencies available to low-power FM stations. But advocates of low-power FM hope to persuade it to relax those restrictions. They could be supported by a recent report concluding those stations would not interfere in any significant way with the signals of commercial stations.

There’s no question the FCC is on the defensive with regard to local content. When the commission, which regulates media outlets, voted in June to further deregulate the media, lawmakers from both parties and a broad range of interest groups criticized the vote, saying the new regulations would give large media companies too much control over what people see, hear and read.

Commissioners voted to loosen media ownership rules and enable the nation’s largest newspaper and broadcasting conglomerates to grow even larger. They agreed to allow a news-paper to buy a television station in the same city or vice versa, combinations known as cross-ownership. The rule changes they approved also would let a broadcast network own a group of television stations that reach up to 45 percent of the national audience. The previous cap was 35 percent.

With regard to radio, the new rules stipulate that noncommercial stations must be counted alongside commercial stations for purposes of classifying media markets. The FCC’s position is that the provision would limit further consolidation of the radio industry. But Hannah Sassaman, program director at the Prometheus Radio Project, argues the reverse is true to the extent that the number of stations in a particular market determines how many stations a corporation may own. 

In September, the U.S. Court of Appeals for the Third Circuit, based in Philadelphia, stayed the rules while it reviews a legal challenge. The Prometheus Radio Project is the plaintiff. It argues the new rules are arbitrary and capricious, and that enactment violated public notice requirements. Oral arguments are scheduled for February.

Also in September, after considerable public outcry, the U.S. Senate voted to repeal those rules. Even if the House agrees, though, the White House has pledged a veto.

But there does appear to be some give on the commission. Over the summer, current Chairman Michael Powell convened a task force to evaluate how broadcasters are serving their local communities. He also said the commission would speed consideration of applications for low-power FM stations. The FCC received more than 3,300 applications when it invited noncommercial groups to apply for licenses in 2000. The commission says it approved more than 800 of those, and that 220 such stations are operating. As of mid-November, about 1,000 applications were pending.

For its part, Clear Channel is working aggressively to counter any perception that it is insensitive to local needs. In a press release this fall, the company announced the coming of new technology that would permit radio listeners to view an artist’s name and song title on the radio. The listener also could view station call letters, traffic information and “other locally focused messages.” 

Congress set the groundwork for consolidation of the radio industry with the 1996 Telecommunications Act. Consolidation already was under way, but the law expedited the trend by increasing the number of stations one company can own in a single market and permitting companies to buy as many stations nationally as their budgets would permit.

The radio industry was floundering financially at the time in the face of proliferation of other media. Clear Channel argues the law saved the industry. And the commission says the industry is on stronger financial footing as a result of the law.

There’s no question, though, that Clear Channel benefited most. The company owns and operates more than 1,200 stations throughout the nation, including 16 in Illinois, and it dominates the radio dial in many cities. The entertainment powerhouse also is the country’s largest producer and promoter of live entertainment. And it is one of the world’s largest outdoor advertising companies. 

While it grew in the early 1970s, Clear Channel standardized practices in the industry. As its leader reminds, it is first and foremost a profit-driven business. “If anyone said we were in the radio business, it wouldn’t be someone from our company,” Lowry Mays, Clear Channel founder and chief executive officer, told Fortune magazine earlier this year. “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 our customers products.”

And as a public company, Clear Channel must answer to shareholders. In this regard, standardizing its practices and products in different markets would seem prudent. “I call it the McDonald’s-ization of radio,” says Barbara Calabrese, chair of the radio department at Columbia College Chicago. “You’re going to get the same thing 

no matter where you go depending on the format.”

But standardization of programming has critics up in arms. They contend such practices destroy local flavor. “It’s a franchise,” says Prometheus Radio Project’s Sassaman. “You can say the McDonald’s in your town is run by people who live in your town but that doesn’t mean that they’re not following a set of strict guidelines and using a set of strictly produced and homogenized products in order to lay claim to that McDonald’s name. Clear Channel is just the same. It’s proliferating a virus of bad radio across the country.”

To the extent that playlists standardize programming, critics say, they fail to challenge the listener.

Still, Calabrese cautions that the practice has existed for at least 20 years. “If you really want to have a good sounding radio station, you program it so that when a person turns on that station at 3 in the afternoon or 5 in the morning, they’re going to get that same sound,” she says. “They come back to you because they like what you’re doing and they want more of that. That has been a good rule of programming for a long time.”

On the news side of programming, Clear Channel has a reputation for keeping news staff to a minimum within each of its clusters. Jay Pearce, interim station manager at WILL AM/FM, based at the University of Illinois at Urbana-Champaign, spent 20 years covering news and managing radio stations in the Marion/Carbondale market. He says he watched news staff dwindle in the face of Clear Channel consolidation. 

“If you have two people on a news staff serving six radio stations, and you’re trying to do news in varying degrees for those stations, where’s your time to go out and report?” Liane Casten, co-founder and president of Chicago Media Watch, a nonprofit group, adds, “As long as consolidation exists, as long as you do not have independent voices, you’re going to have synchronization of the news in ways that are not necessarily healthy for a free society.”

Clear Channel officials maintain the company’s organization actually is decentralized, and that key programming decisions are made at the local level. They say the company employs “900 programmers,” based at local stations. They say the company 

spends millions of dollars each year to determine what listeners want to har, and that programming is determined by this data.

Clear Channel also says radio listeners enjoy an unprecedented selection of radio formats as a result of its efforts. And a company spokeswoman provided data attributed to the Mediabase airplay tracking service that demonstrates, in Clear Channel’s words, the company has “steadily increased the number of unique songs and unique artists played on its radio stations.”

The spokeswoman also downplayed concerns over importing voices: “Clear Channel focuses on local personalities and local information,” she said in a statement. “Air talent importations constitute less than 9 percent of total programming using popular personalities with broad appeal. The majority of voice tracking relies on on-air personalities within the local market and broadcast in the overnight hours.”

The spokeswoman also said the radio industry remains competitive compared to other large industries. She provided an analysis attributed to the Herfindahl-Hirschman Index, which the U.S. Justice Department uses to measure market concentration and evaluate the anti-competitive consequences of corporate mergers. The analysis, dated February 2002, concludes the radio industry is less consolidated than 10 other industries including telecommunications, car rentals and pharmaceuticals.

Recording artists have complained for a decade that radio is killing great music by playing too little of it. Veteran rocker Tom Petty eulogized his good old days of the music industry in his 2002 song The Last DJ:There goes the last DJWho plays what he wants to playAnd says what he wants to sayAnd there goes your freedom of choiceThere goes the last human voiceThere goes the last DJNo question, the radio industry is at a turning point. Still, Columbia’s Calabrese is confident the medium is not going away. “When TV came along they said, ‘It’s the death of radio.’ And now that they have Internet and satellite they say, ‘It’s the death of radio.’ It’s always the death of radio,” she says. “I don’t believe that’s going to happen. 

What do people do when something happens? Right away they go to their radio. Radio is very immediate and very personal.”

Just how immediate and personal is not yet clear. 

Illinois Issues, December 2003