Media Regulation & Policy

Lecture notes for Media & Society
Zack Furness
Wireless Ship Act of 1910
• States that large ships need to have a radio on board
Titanic error…
Radio Act of 1912
• Says that large ships need to have a radio…and it needs
to be turned ON, with a full-time operator at the helm.
Radio Act of 1912
In addition to being a response to the Titanic disaster, this
piece of legislation also does the following:
1. Establishes government’s right to regulate the airwaves
2. Gives broadcasting priority to the military
Radio Act of 1927
• Response to Federal court ruling – Dept. of Commerce
was deemed unable to continue governing radio
• Creates the Federal Radio Commission (FRC) to do the
• Licensing – By 1926 there were 15,111 amateur stations, 1,902 ship
stations, 536 broadcasters, etc.
• Regulate for public good – “public interest, convenience, and necessity”
• Thrown together without significant debate
• Left key issues unresolved
• Favored profit model of commercial broadcasting at the
expense of other possible models
Communications Act of 1934
• Created the Federal Communication Commission (FCC)
• Allowed govt. to regulate wired and wireless
communications on a nation-wide basis
• Strengthens the ad hoc 1927 Radio Act
• Radio corporations stage a big PR campaign prior to the bill getting
passed…they want the commercial model preserved for profits.
• The Wagner-Hatfield amendment would have given 25% of all
radio broadcasting facilities to non-profit institutions and
organizations (primarily educational). It was voted down.
• Sold as a New Deal program, but was it for the benefit of the
Telecommunications Act of 1996
Key provisions:
• Allows for cross-industry competition in new ways
• Relaxes restrictions on ownership in each area
Key Effects:
• New wave of temporary competition
• Increasing consolidation of industries and concentration of
• Increased profitability for the winners
1996 Telecom Act – Deregulation
Just some of the rules scrapped by the 1996 bill:
• A local limit of 1 AM station plus 1 FM station and a
national limit of 20 AM plus 20 FM stations (40 total).
Now unlimited
• Corporations limited to ownership of 12 local TV stations.
• Prohibited ownership of a local radio or television station
and a major local daily newspaper
Now only minor restrictions
• A company can own TV stations reaching no more than a
25% share of U.S. TV households. Now up to 45%
• Broadcast license renewed every 5 years. Now 8 years,
with much less burden to get re-licensed
1996 Telecom Act – Deregulation
Digital Spectrum giveaway to big media corporations:
• Whereas the public owns the airwaves, corporations were
given the digital ‘airwaves’ without being charged a dime
• The FCC estimated that had the licenses been auctioned
off they would have been worth $70 billion to the public
• Senator Dole called it “the biggest giveaway of the
century. Here we are, trying to balance the budget, cutting
welfare, cutting other programs, and about to give a big
handout here to the rich, the powerful”
• Broadcasters still won’t give up the analog spectrum,
despite and the FCC won’t force them (could be used for
emergency services, education, indy media, etc.)
1996 Telecom Act – Myth vs. Reality
Myth: Promised to create more competition, more diversity,
lower prices, and more jobs.
Reality: The public got more media concentration, less
diversity, and higher prices.
• Example: Over 10 years, the legislation was supposed to save
consumers $550 billion ($333 billion in lower long-distance rates,
$32 billion in local phone, and $78 billion in cable bills).
• Cable rates surged by 50% and local phone rates went up more
than 20%.
• Example: Industries said it would add 1.5 million jobs and boost the
economy by $2 trillion.
• By 2003, companies shed half a million jobs and their market
values had fallen by about $2 trillion.
1996 Telecom Act – No Public Info
• In December 1995, a USA Today/IntelliQuest survey
showed that about half of the US population never heard
of the telecommunication bill (it passed 2 months later).
• In the year before the bill was passed, just 19 minutes of
air time was devoted to the bill on all of the major TV
networks combined.
• Not even a single minute was spent on the digital spectrum
provision of the bill (a $70 billion givaway to corporations).
• Of the sparse articles published in newspapers in the year
prior, most articles were not front page stories – typically
they were printed in the ‘Business’ or ‘Finance’ sections.
Real Effects of the 1996 Bill
Corporate Winners – Ex. Clear Channel
• Largest radio company in the US – Once owned over
1200 stations (the limit used to be 40). Now around 850.
• Owns the country's largest syndication service, Premiere
• $6 billion in revenue in 2011.
• Has contributed to substantial drop in the number of
minority station owners, homogenization of play lists, and
less local news.
Real Effects of the 1996 Bill
Push back against the industry & FCC in 2003
• For examples: Prometheus Radio Project v. FCC
But, the same situation for most of us
• Roughly 95% of the households with access to cable are
served by only one cable company
• Skyrocketing cable and phone bills
• Virtually no public oversight over digital realm
• Still have little ability to use the analog spectrum for
• Still subject to un-free market rules, regulations & norms