Last month's announcement of the proposed merger of the nation's two satellite radio services was big news. And with good reason — it's a big deal. After all, there's big money at stake. The planned merger of Sirius and XM is valued at $13 billion. There are big names involved: Howard Stern, Bob Dylan and Oprah Winfrey all have lucrative deals with satellite radio. If the Federal Communications Commission (FCC) approves the merger, the new company would realize big savings.
Then again, there's a big downside. A merger of this sort means big job losses at both companies. And with a bigger audience, the new satellite radio service would have enormous leverage over potential advertisers eager to reach an estimated 14 million paid subscribers.
Finally, in the absence of a competing service, the new company would have a big advantage over producers, performers and other on-air talent, not to mention the retailers and automobile manufacturers who sell satellite radio receivers.
Not surprisingly, the prospect of a satellite radio monopoly doesn't sit well with over-the-air broadcasters. The broadcasting industry's trade association, the National Association of Broadcasters ( NAB ), was quick to cry foul.
In an official statement, the NAB suggested that if federal regulators approve the deal, it would amount to a "government bail-out" for an industry with a suspect business model and a knack for paying outrageous sums for programming and on-air talent. Furthermore, the NAB cautioned policymakers to "weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming."
Were the NAB's public interest concerns not so hypocritical, they would be quite touching. The fact of the matter is that the NAB's complaints have nothing to do with any serious commitment to good taste, competitive markets, and consumer choice. Rather, they are guided by myopic self-interest.
But since the NAB has raised the specter of monopoly ownership, anti-consumer behaviors and offensive programming, we ought to consider the dangers of consolidation across every sector of the media industry—from terrestrial radio and television broadcasting, to cable, newspapers and telecommunications.
Call it fortuitous timing, but the same week Sirius and XM made their announcement — and the NAB voiced its disingenuous if predictable opposition to the deal — the Federal Communication Commission was conducting a public hearing on media ownership in Harrisburg, Pennsylvania.
Unlike news of the planned Sirius-XM merger, chances are you didn't hear much about these public hearings. Big Media likes to keep public participation in policy making to a minimum, so press coverage of these hearings is hard to come by. Thing is, the issues raised by the NAB regarding satellite radio are applicable to terrestrial broadcasting as well.
Ever since the 1996 Telecommunications Act, when ownership rules were "relaxed" in local and national markets, the radio industry has undergone dramatic consolidation. The result: the loss of broadcast localism, ever higher barriers of entry into local markets, a precipitous decline in minority-owned outlets, and the hyper-commercialization of the airwaves.
The nation's largest radio company, Clear Channel, illustrates just how anti-competitive our airwaves have become in the past decade. Prior to passage of the 1996 act, the San Antonio-based Clear Channel operated fewer than 40 stations across the country. Since "deregulation," Clear Channel has acquired 1200 radio stations nationwide. In some local markets, Clear Channels owns as many as eight stations.
For Clear Channel, market dominance of this sort has big advantages. With precious little competition, Clear Channel sets local advertising rates as they like. And through the use of satellite technology, Clear Channel beams canned programming to hundreds of distant stations across the country. As a result, there's no need for local DJs, reporters, or technicians for that matter. Small wonder that commercial radio sounds the same wherever you go—it is!
This arrangement works well for Clear Channel and its shareholders. But as sociologist Eric Klinenberg illustrates in his must-read new book, Fighting for Air: The Battle to Control America's Media media consolidation has dire consequences for the public interest.
So take a page from the NAB playbook. Tell the FCC that you too are concerned about monopoly ownership of satellite radio. While you are at it, demand that the FCC protect localism, encourage ownership and viewpoint diversity, and limit corporate consolidation of broadcasting, cable television and the telecommunications industry. It's time to put the public interest back into U. S. communication policy.
Kevin Howley is associate professor of media studies at DePauw University.