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Losing Signal: The Demise of Local Radio
Torey Fox
November 20, 2012
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Despite the growing popularity of television, personal tablets, and the internet, one form
of media has remained constant for over a century and continues to play a vital role in people's
daily lives. Of course, that form of media is the AM/FM radio. Thanks to Marconi’s invention in
the late 1890s, radio continues to be a special form of media known for revitalizing the music
industry and offering listeners every piece of local news, weather, and sports. Radio has also
been an informal public forum where listeners have been free to express their opinion on any
topic that crossed their respective minds. However, today’s local radio industry is not what it
once was and is teetering on the brink of extinction, threatening many aspects of radio, like
employment and programming, that few understand. This has left many radio professionals
worried about the future of an industry that once thrived in so many places. Their biggest fears
stem from the recent Telecommunications Act of 1996 (passed under President Bill Clinton) that
has shifted radio from a locally owned entity to a nationally controlled poker chip, free from
government regulation and immune from listener input. Due in large part to this revolutionary
legislation, the local radio industry nationwide is negatively transforming in terms of ownership,
program diversity, and public perception. Despite the debate over whether these changes even
exist, it is clear that the characteristics of radio will continue to be altered in the near and distant
future, leaving a lasting impact on local radio all across the United States.
After Marconi’s invention of radio grew in terms of number and popularity, Congress
enacted multiple pieces of legislation to govern this new technology. According to Anastasia
Bednarski (2003), the first was the Radio Act of 1912 that gave power to the Secretary of
Commerce to govern radio signal disputes throughout the country. However, the act proved to be
ineffective as the Commerce department could not do the job adequately; therefore, the law was
replaced by the Radio Act of 1927. The pieces of legislation continued with the major
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Communications Act of 1934 (1934 Act) that merged the Federal Radio Commission with the
Interstate Commerce Commission to create the Federal Communications Commission (FCC) that
still exists today. The FCC was born straight out of FDR’s New Deal and was handed the powers
of all three branches of government seemingly on purpose according to former FCC director
Harold Furchtgott-Roth in his book A Tough Act to Follow? (2006, pp. 15-16). This was done
due in large part to the lack of faith in private markets during the Great Depression. The 1934
Act set a regulation precedent in the United States, placing limitations on the ownership and
transfer of broadcast licenses due to the government’s belief that radio was a “scarce public
resource” that needed oversight (Bednarski, 2003, p. 3). Fearing broadcasters’ potential political
and economic power, the United States government sought out this heavy regulation.
The Communications Act of 1934 would govern the United States telecommunications
industry for over sixty years until Congress came together to form the revolutionary
Telecommunications Act of 1996. However, changes in the industry were not seen overnight but
rather over many years thanks to the FCC. The FCC had previously introduced ownership caps
in 1940, mandating a limit of six FM stations, but thirteen years later the caps were raised to
seven AM and seven FM stations—commonly known as the “Rule of Seven.” According to the
FCC, the purpose of the Rule of Seven was “to promote diversification of ownership…to
maximize diversification of program and service viewpoints…[and] prevent any undue
concentration of economic power contrary to the public interest” (as cited in Bednarski, 2003,
p.3). The Rule of Seven would be the law of the land for decades, but after eight petitions from
individuals in the radio industry advocating for the abolishment of ownership caps, the FCC
conceded to change the Rule of Seven to the “Rule of Twelve,” increasing the national
ownership limit to twelve AM and twelve FM stations but keeping the local ownership cap at
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one. Despite the changes, owners in the industry continued to fight the FCC, claiming the
broadcast industry was financially in trouble because of the caps (Polinsky, 2007). Therefore, the
FCC rewrote the law, once in 1992 and once again in 1994, finally setting the national limit at
twenty AM and FM stations. However, twenty radio stations were not enough for the media
moguls. Their political battle continued until 1996 when President Clinton signed the landmark
Telecommunications Act.
According to Christopher Sterling (2006), the 1996 Act overhauled American
communications in terms of license renewals and ownership. Before the Act, radio broadcasters
had pushed the FCC to create some sort of “renewal expectancy” if the radio license was
providing acceptable service (as cited in Sterling, 2006, p. 2). This push was finally met when
Congress and the FCC agreed that a license can automatically be renewed if three provisions are
met: “(A) the station has served the public interest, convenience, or necessity; (B) the licensee
has not been found guilty of ‘serious violations’ of the Act or FCC rules; and (C) the licensee has
committed ‘no other violations’ of the Act or FCC rules ‘which, taken together, would constitute
a pattern of abuse’” (as cited on p. 2). Although these provisions exist, license renewals have
now become substantially easier, so much that the FCC has rejected very few radio licenses since
1996. Aspects like programming, content, and broadcasters are now rarely taken into account as
the FCC has made the respective renewals “all but automatic” at the expense of radio listeners
(p. 2). In terms of local and national ownership, Heather Polinsky (2007) notes the 1996 Act has
revamped telecommunications. Local ownership caps have been substantially relaxed and set at a
limit that depends strictly on the number of market stations in the local area. The table below
showcases these new rules.
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(Polinsky, 2007, p.127)
On the national level, all station ownership limits were eliminated, much to the joy and praise of
those in the industry. However, this change in radio ownership has left a substantial impact on
the state of radio all over the United States as many small and local owners have been wiped out
by major media corporations.
With the abolishment of national ownership limits in the United States, many mass media
organizations were formed that immediately changed the face of local radio. According to one
estimate, approximately $700 million in transactions occurred within the first week after the law
was passed (Bednarski, 2003). CBS, the largest radio corporation with 39 stations and 6% of
radio revenue pre-1996, was quickly surpassed in 1998 by Infinity Corporation, which at the
time controlled 158 stations and almost 17% of radio revenue (Sterling, 2006). By 2001, the
number of commercial radio station owners dropped by 25%, from 5,100 owners in 1996 to
3,800, and by March 2002, the radio industry had “consolidated to the structure it still holds
today.” (p. 4)
One major media corporation blamed for consolidating the radio industry is Clear
Channel Communications. According to Damone Richardson and Maria Figueora (2004), Clear
Channel was founded in 1972 as a single radio station, but thanks to the Telecommunications
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Act, Clear Channel has increased the number of radio stations they own from 43 in 1996 to over
1,300, which is five times the size of its nearest competitor. Clear Channel would solidify its
market position by purchasing numerous rival corporations like Eller Media, AM/FM, SFX Inc.,
and Ackerley Group for an estimated $22 billion. The company would then go on to purchase
assets like concert venues, television stations, and live theaters to promote via their new radio
stations (Kidd, 2005, p. 270).
Due to the power and size of companies like Clear Channel, local radio is seeing a major
decline. The decline has been so steep that Dorothy Kidd (2005), professor of media studies at
the University of San Francisco, strongly believes “large media conglomerates are killing radio”
(p. 268). For example, Clear Channel Communications and other companies like Infinity and
Disney-ABC are replacing local music and local radio personalities with computers and national
playlists that originate far from the radio audience. Therefore, many popular, small-town DJ’s
and other staff are being laid off for no reason of their own. This troubling fact has worried many
local radio station owners across the country, including Wayne Brown of WPEG-FM in
Charlotte, North Carolina. Brown said at the National Association of Broadcasters’ Radio Show
in October 1996 that “the biggest challenge [after the Telecommunications Act of 1996] is
reassuring the talent that they still have a place in the company” (as cited in Huntemann, 1999, p.
401). In the years since the Telecommunications Act, local radio station owners are also at risk
of losing their jobs when a major corporation purchases someone’s respective radio station.
When multiple radio stations are purchased, the original owners are forced to be consolidated or
are replaced by regional managers who are in charge of multiple stations. This has occurred in
many major US cities like Phoenix, Cincinnati, and Sacramento where general managers are in
charge of three, sometimes even four radio stations at a time. Ultimately, Wayne Brown’s radio
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station in Charlotte was gobbled up by American Radio Systems as part of a six-station purchase
in the Charlotte area.
Another byproduct of the Telecommunications Act of 1996 and the growth of major
media organizations is the decline of minority ownership in the radio industry. Nina Huntemann
(1999) explains that since the 1996 Act, minority ownership fell from 3.1% to 2.8% in 1997,
despite the growth in the number of radio stations. A factor in this decrease of minority
ownership was Clear Channel’s purchase of US Radio, which had been the largest African
American-owned broadcast company, in the months following the Telecommunications Act. In
addition to the new law, Congress repealed a tax certificate program in 1995 that significantly
hurt minority radio station owners across the country. That certificate program “allowed sellers
of broadcast properties to defer payment of the capital gains tax if they sold their licenses to a
person of color or a woman” (p. 397). During the years the certificate was law, minorities and
women acquired 288 radio stations, 43 television stations, and 31 cable systems, which was a
substantial increase from the 80 radio stations minorities owned before 1978. The repeal of the
certificate was a devastating blow and a controversial decision as Congress believed the
certificate had loopholes that essentially gave tax breaks to millionaires. It also came under fire
because of media companies like Viacom that deferred $400 million in federal taxes and
upwards of $200 million in state taxes while the certificate was in effect (Krasnow & Fowlkes,
1999, p. 4). Finally, another way minority owners are struggling in today’s radio industry is
because of their inability to raise advertising dollars. With limited revenue, minority-owned
stations are not able to expand and compete with major corporations who work on a regional and
national scale, as opposed to just local. The radio market is so tough on minorities today that
David Honig, director of the Minority Media and Telecommunications Council, described the
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current state of radio ownership as “the worst environment for minorities…since the 1950s” (as
cited in Huntemann, 1999, p. 397).
Although the effects of the Telecommunications Act of 1996 are most felt on local radio
ownership, today’s program diversity has also been harmed by the recent law. According to Alec
Foege in his book Right of the Dial (2008), the driving force behind this belief is that “Most
commercial stations these days measure their success primarily by advertising revenue, not
listenership” (p. 114). This means radio stations and owners will follow the money instead of
what communities of local people want. A classic example is one of New York’s most popular
oldies radio stations, WCBS-FM, which had delivered music to the New York area for over
thirty years. But in June 2005, WCBS-FM abruptly switched formats to a DJ-less station of tunes
from the 1970s to today. The reason? According to the station’s general manager, the move was
made strictly because of “market research” and a “hole in the market that wasn’t being served”
(as cited on p. 114). Major corporations are also driving the advertising. In most radio stations,
items like station equipment, programming, and employee salaries depend on advertising
revenue, meaning advertisers play a major role in key radio decisions. If an advertiser does not
approve of a certain DJ or program, it will likely be eliminated to better return an advertiser’s
investment. In today’s radio market, many executives believe in this theory, including former
Clear Channel CEO Lowry Mays, who eloquently stated that Clear Channel “[was] not in the
business of providing music, news, or information” but rather “selling advertising to consumers”
(as cited in Kidd, 2005, p. 273).
Besides the added emphasis on advertising revenue, major radio corporations have
consolidated music playlists and distributed them through regional program directors and offices.
This in turn has negatively affected local genres, DJ’s, and public perception of programming.
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With many radio stations consolidated under one ownership group, regional music directors can
compile a music playlist, coupled with national advertisements and corporate spin, and digitally
send the finished product to all the different radio stations owned by that one specific company.
For example, Capstar Broadcasting operates 313 radio stations through only six regional offices,
utilizing a program called StarSystem that delivers most of the company’s programming to all its
affiliates, regardless of location and local preference (Huntemann, 1999). Another sign of
decreased local power over radio is the growth of syndicated programming. Numerous radio
organizations are purchasing the rights to talk show personalities like Howard Stern and Rush
Limbaugh and music programs like America’s Top 40 with Ryan Seacrest. This increase in
national programming has continually depleted the opportunity for local citizens to make it onair in their respective cities and towns. In 2012, David Crider published a research study of 98
radio stations of various sizes and format in the Journal of Broadcasting & Electronic Media. It
showed that large stations (top 25 radio groups by revenue, $63 million-$3.5 billion) ran on
average 15.8 hours or 68% of syndicated programming while only airing 7.41 hours or 32% of
local programming. He concluded that in smaller markets where local issues take precedence,
“radio denies them a proper forum for discussion” (p. 242). When local radio is taken away from
the individual, Crider also stated that “a large geographic portion of the country is ignored” and
“the foundation of the public sphere, and of American democracy, is further weakened” (p. 242).
In terms of music, Michael Saffran published a 2011 research study in the Journal of Radio &
Audio Media that examined the amount of locally made music on the radio. He found that more
than 75% of survey participants claimed perceptions of “None” or “Very Little” music by local
musicians on-air with only 2% claiming “A Lot.” As Crider explained, “these stark results will
surely trouble…local musicians vying for airplay on their hometown radio stations” (p. 288).
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Local radio has long been a reliable source of news for the general public, but massive
changes in today’s radio industry are jeopardizing that assertion. Due to their fiscal history, Clear
Channel Communications has been associated with the Bush family dating back to George W.
Bush’s gubernatorial campaigns in the 1990s and his subsequent presidency in the 2000s (Kidd,
2005). After 9/11 and the invasion of Iraq, Clear Channel was notoriously cited for airing only
pro-Bush programming on their airwaves. The company even mandated that 158 “offensive”
songs be removed from their corporate playlist (as cited on p. 273). The list included John
Lennon’s “Imagine,” Cat Stevens’ “Peace Train,” and Paul Simon’s “Bridge Over Troubled
Water.” Clear Channel continued to interfere with the local radio sphere by firing and removing
certain DJ’s for airing pro-Democrat programming and denouncing the war in Iraq on-air. One
employee, Roxanne Cordonier, sued Clear Channel, “claiming she was belittled by colleagues on
and off-air for her opposition to the [Iraq] war, and forced to participate in pro-war rallies” (p.
274). Clear Channel even admitted assisting conservative talk show host Glenn Beck in
organizing eighteen pro-military rallies during the Iraq war, primarily in the heavily conservative
South. In terms of local journalism, major media corporations continue to be criticized for using
pre-recorded news bits from national news outlets like CNN. If a city is lucky, these prerecorded bits might contain some sort of regional news that directly applies to them; however, if
that is not the case, local citizens are left wondering what is happening at all in their area. A
prime example of this conundrum was a 2002 chemical spill in Minot, North Dakota. Minot was
home to six radio stations—all owned by Clear Channel—that together employed one full-time
person who only read newscasts from state and national wire services. When the chemical spill
occurred, all six stations were spewing automatic satellite feed programming, including the
designated emergency station KCJB, leaving everyone without critical information regarding the
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spill. Author Ben Bagdikian called the Minot incident “the systemic negligence of the public
interest throughout the country” and noted that local radio listeners have officially been “robbed
of their airwaves” (as cited on p. 272).
Today, many columnists and professionals in the media industry have noted their
collective fear that radio and the public sphere have been and will continue to be negatively
affected by the drastic changes stemming from the Telecommunications Act of 1996. The
Telecommunications Act was swept into law with optimism and support by many lawmakers and
media officials, but the intentions and effects of the law are continuing to inflict harm on local
owners, employees, and advocates of radio in general across the United States. Ronn Mott, a
longtime Terre Haute, Indiana, radio personality, now writes an editorial for the local Tribune
Star newspaper in Terre Haute. In his September 29, 2012 column, Mott took a brief, but
poignant look at the demise of the local radio industry that once gave him much joy during his
illustrious career:
Radio used to be known for its outstanding personalities. Some were funny, some were
obscene, and not a single one of them would be hired today by the organizations that
want to control everything. So, all of those aforementioned things—spontaneity,
creativity, etc.—have fallen to the pages of a comptroller’s control…[In the Terre Haute
area], you will get what is happening in every major market in America. No individuality,
no creativity, and almost a total lack of variety across the dial. Will all of these multiple
ownerships be good for our country, our cities, and the hinterland? The obvious answer
is….no.
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References
Bednarski, A. (2003, March). From diversity to duplication: Mega-mergers and the failure of the
marketplace model under the Telecommunications Act of 1996. Federal Communications
Law Journal, 55(2), 273-296.
Crider, D. (2012, April). A public sphere in decline: The state of localism in talk radio.
Journal of Broadcasting & Electronic Media, 56(2), 225-244. doi:
10.1080/08838151.2012.678514
Foege, A. (2008). Right of the dial. New York, NY: Faber and Faber.
Furchtgott-Roth, H.W. (2006). A tough act to follow? Washington D.C.: AEI Press.
Huntemann, N. (1999, October). Corporate interference: The commercialization and
concentration of radio post the 1996 Telecommunications Act. Journal of
Communication Inquiry, 23(4), 390-407. doi: 10.1177/0196859999023004006
Kidd, D. (2005). Clear Channel and the public airwaves. In E. Cohen (Ed.), News incorporated
(pp. 267-282). Amherst, NJ: Prometheus Books.
Krasnow, E.G., & Fowlkes, B. (1999, May). The FCC’s minority tax certificate program: A
proposal for life after death. Federal Communications Law Journal, 51(3), 665-679.
Mott, R. (2012, September 29). Radio changing—and not for better. Tribune Star, p. A12.
Polinsky, H. (2007, November). The factors affecting radio format diversity after the
Telecommunications Act of 1996: Ownership concentration, stations and audiences.
Journal of Radio Studies, 14(2), 122-143. doi: 10.1080/10955040701583205
Richardson, D. & Figueroa, M. (2004, Fall). Consolidation and labor in arts and entertainment: A
peek at Clear Channel. WorkingUSA, 8(1), 83-97. doi: 10.1111/j.17434580.2004.000006.x
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Saffran, M.J. (2011, July). Effects of local-market radio ownership concentration on radio
localism, the public interest, and listener opinions and use of local radio. Journal of
Radio & Audio Media, 18(2), 281-294. doi: 10.1080/19376529.2011.616469
Sterling, C. H. (2006, June). Transformation: The 1996 act reshapes radio. Federal
Communications Law Journal, 58(3), 593-602.