A Wisconsin senator took aim at radio and concert-promotion giants on Thursday with legislation that seeks to curb alleged anti-competitive practices in the recently deregulated industries.
Pointing to a decline in local ownership of radio stations, escalating ticket prices, and strong-arm promotion tactics, Democratic Sen. Russell Feingold said his bill would rein in the worst abuses of an industry that has undergone rapid consolidation since ownership caps were relaxed in 1996.
“I think it is time for Congress to make a strong statement on this,” Feingold said.
The 1996 Telecommunications ( news – external web site) Act eased restrictions on how many radio stations one company can own in a given market, allowing titans like Clear Channel Communications Inc.. to buy their way to industry dominance. The San Antonio company now owns more than 1,200 radio stations nationwide, along with a billboard business and the nation’s largest concert-promotion company.
Recording artists, independent radio stations and local promoters allege that Clear Channel and other large players use their dominant position to shut out competitors, punish artists who do not use their promotion services, and exceed ownership limits behind shell corporations.
Listeners say that the airwaves are now dominated by bland, interchangeable stations driven by the bottom line. In some cities, 95 percent of the radio dial is controlled by four companies, Feingold said.
Recording companies charge that the radio giants have encouraged the pay-to-play practice known as payola by insisting that they go through “independent promoters” who charge astronomical sums to get singles on the air.
Clear Channel defended its business practices in a statement and said that government intervention was not a good idea.
“We do not believe that it is in the best interest of any of our constituencies to have the government legislate private business practices to the degree that Sen. Feingold proposes,” said Mark Mays, president and chief operating officer of Clear Channel, in a statement.
Feingold’s bill would direct the Federal Communications Commission ( news – web sites) to revoke the license of any radio station engaged in anti-competitive behavior, and would update payola laws to cover independent promoters.
The bill would not reinstate pre-1996 ownership caps, but it would prohibit the FCC ( news – web sites) from relaxing the caps any farther. The FCC would also be examine the effects of consolidation and issue an annual report on the state of the industry.
“We’re not completely turning back the clock, but we’re trying to prevent further damage,” Feingold said.
Recording companies, musicians’ groups and a consumer organization lined up to support the bill, as did the National Association of Black Owned Broadcasters.
Clear Channel’s Mays said that when measured by revenue, radio-station ownership is less concentrated than in movies, cable television and record labels. High ticket prices are the result of musicians’ demands, he said, while recording companies are responsible for the rise of independent promoters because they continue to give them money.
Clear Channel shares were trading at $32.10 in afternoon trading on the New York Stock Exchange ( news – web sites), down $3.65 or 10.12 percent from Wednesday’s close.