U.S. lawmaker asks for Clear Channel investigation

By | February 6, 2002 at 12:00 AM

A U.S. lawmaker has asked federal regulators to investigate complaints that Clear Channel Communications Inc abused its dominant market position as the No. 1 radio broadcaster and concert promoter to shut out competitors.

In a letter to Attorney General John Ashcroft and Federal Communications Commission Chairman Michael Powell, U.S. Rep. Howard Berman called for an investigation into allegations that Clear Channel limited airplay of artists such as Britney Spears for not using its concert promotion services.

“These allegations, if true, have obvious, negative implications for consumers, both through higher concert ticket prices and reduced selections of broadcast music,” Berman wrote in the Jan. 22 letter obtained by Reuters.

Clear Channel has led the U.S. concert promotion market since its $4 billion acquisition of SFX Entertainment in 2000, producing about 26,000 live events annually.

Through additional acquisitions, Clear Channel has also become the dominant force in radio, with 1,200 stations.

In his letter, Berman, a Democrat from California, said the clout of a single entity controlling radio stations, TV stations, concert promotion services and other distribution channels for copyright content raised potential problems.

A spokeswoman for the Department of Justice said the agency was reviewing Berman’s request. A spokeswoman for the FCC was not immediately available.

AGGRESSIVE AND FAIR

A Clear Channel spokesman said the company plays by the rules. “We are satisfied and excited about the ways we have grown our businesses. Our company competes aggressively, fairly and totally within the law,” said Clear Channel spokesman Randy Palmer.

“If there is an investigation, we are confident this will continue to be proven true,” he said.

Berman’s action followed a chorus of complaints within the industry and a lawsuit filed against Clear Channel in August by a small Denver concert promoter, Nobody in Particular Presents.

In the suit, the promoter charged Clear Channel with using its radio stations to play Clear Channel-promoted artists in the Denver area, while excluding or limiting airplay of artists promoted by smaller competitors.

The suit also alleged that artists were threatened they would lose airplay and on-air promotional support unless they use Clear Channel as their concert promoter.

A spokeswoman for Berman said several recording stars had approached the lawmaker on the matter, but declined to elaborate.

Clear Channel’s unrivaled leadership in radio and concert promotion has long been a sore spot for its competitors and is often a topic at industry conferences.

The music business has come under regulatory scrutiny recently with antitrust enforcers at the U.S. Justice Department looking into the online music business, including two new joint ventures. Regulators have also launched a probe of allegations of CD price-fixing.

“The consolidation of the radio industry also lends growing support to persistent allegations of incidents in which record companies must pay radio stations to play the music of their artists,” said Berman.

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