NEW YORK -- 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, since 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."
Some facts about Clear Channel Communications Inc.
- FOUNDED: 1972 in San Antonio, Tex., as the San Antonio Broadcasting Co. by investment banker Lowry Mays and a partner.
- TOP EXECUTIVES: Lowry Mays is the current chairman and chief executive; son Mark Mays is president and chief operating officer, son Randall Mays is executive vice president and chief financial officer
- FINANCES: $8.5 billion in revenues in 2002; In the most recent quarter ending June 30, revenues were $2.3 billion; earnings were $632.9 million.
- TOP RIVALS: Citadel Broadcasting, Cumulus Media and Infinity Broadcasting
- RADIO DIVISION: Consists of roughly 1,200 radio stations in the United States and more than 245 overseas; accounts for nearly 70 percent of corporate earnings in the last quarter.
- OUTDOOR DIVISION: Consists of billboards and other outdoor advertising, including many of the light displays in Times Square; accounts for 24 percent of corporate income
- ENTERTAINMENT DIVISION: Produces music concerts, Broadway and other theater shows, as well as traveling museum exhibitions such as the "Titanic" and sports and motor sports events; owns and operators more than 130 concert halls, amphitheaters and other venues in North America and Europe; also owns SFX Sports Group, which represents Michael Jordan, Andre Agassi and others; accounts for 9 percent of corporate income, and is the division Wall Street would most like to see Clear Channel unload.
- TV DIVISION: 36 U.S. stations; usually represents just under 3 percent of company income