Statement of U.S. Senator Russ Feingold (Wisconsin)
at the Senate Commerce Committee Hearing
on Media Concentration and Ownership in Radio
January 30, 2003
Feingold: Thank you very much Mr. Chairman for holding
this hearing and my thanks also to the ranking member, Senator
Hollings for holding this hearing to examine the effects of radio
station ownership consolidation. I appreciate the conversations
I've had with both of you about this and this is a very early
time in the session to be able to bring up this issue, so I'm
grateful. I also want to thank Senator Dorgan for his leadership
on this issue. If Congress had heeded Senator Dorgan's warnings
about the effects of consolidation on many of our communities,
perhaps we wouldn't have to be here today.
Before I begin, I would ask Mr. Chairman that my full statement
be allowed to be printed in the record.
McCain: Without objection.
Feingold: Let me start by saying that like, I'm sure,
all of you, I love radio. It brought baseball play-by-play and
Bob Dylan songs into my life, along with many other enriching
influences. I'm sure everyone in this room has his or her own
version of that sentence, because radio always has been -- and
continues to be, despite competition from assorted new technologies
-- nothing less than the soundtrack of American life. Whatever
our different experiences, we are all beneficiaries of radio's
basic, uncomplicated and utterly vital principle: Radio is a
public medium that must serve the public good.
But, over the last year, Mr. Chairman, I have learned that
the rapid consolidation in ownership of the radio and concert
industry has made it difficult for individuals, artists, and
organizations to find outlets to express their creativity and
promote diversity.
To be honest with you, Mr. Chairman, I find that a groundswell
of anger is building in Wisconsin and across the country about
these changes. People are actually angry about this. I know this,
of course, because when people are angry they tend to call up
their senators.
I received my first contact about this more than a year ago.
Owners of a local concert promotion company said they were being
pushed out of business by the anti-competitive practices of a
large radio station and promotion company. Then I heard independently
from a local radio station owner. He said his station had, without
warning and without compensation, lost syndicated programming
-- in fact, after investing lots of years and a big chunk of
money into building an audience for that program -- to a station
across town, a station recently bought by a large radio station
ownership group. Both of these small, local businesses that I
just mentioned cited the same company the Clear Channel
Corporation.
I first asked the Administration to look into anti-competitive
activities and allegations that Clear Channel and other companies
were trying to evade the already minimal local ownership limits.
I didn't hear back for quite a while.
I did, however, get an earful from many others, especially
after I spoke to a reporter from the Chicago Tribune.
In the interview I simply expressed my concerns about these issues.
I also mentioned that I was looking at possible legislation.
The response to this was overwhelming and fervent. Songwriters,
artists, promoters, managers, consumer groups, religious organizations,
unions and radio station owners all called or wrote right away,
asking "What can I do to support your efforts?"
Mr. Chairman, this legislation is not just about entertainment.
More broadly, neither is this issue. I am here not just because
I want to preserve radio as entertainment. I'm also here because
we must preserve radio as a medium for democracy.
There will likely be a number of conflicting views expressed
about the levels and effects of radio ownership consolidation
during the hearing today. After all the market power can be measured
in a number of different ways. Some may argue that owning a thousand
stations is only a fraction of the total number of stations in
the United States. While this statement is true, I think it is
important to view any ownership numbers in recent historical
perspective.
When the 1996 Telecommunications Act became law there were
approximately 5,100 owners of radio stations. Today, Mr. Chairman,
there are only about 3,800 owners, a reduction of 25%. Minority
ownership has also decreased the number of African American
owners of radio stations has fallen by 14%. Prior to 1996, one
company couldn't own more than 20 AM stations and 20 FM stations.
Now two companies -- two companies, Mr. Chairman -- control 42
percent of the content that reaches listeners and 45 percent
of industry revenues.
The concentration of ownership is perhaps most startling when
we look at radio station ownership in local markets.
Four radio station companies control nearly 80 percent of
the New York market. Three of these same four companies own nearly
60 percent of the market share in Chicago. In my home state of
Wisconsin, four companies own 86 percent of the market share
in our largest, Milwaukee radio market.
At the same time that national and local markets have been
consolidated, I have heard really countless stories of how some
of the large radio station ownership groups also wield increasing
power through their ownership of a growing number of businesses
related to the music industry.
Take Clear Channel as an example. This corporation owns more
than 1,200 radio companies, Mr. Chairman; more than 700,000 billboards,
and controls venues across the United States. It also owns the
largest concert promotion company in the United States.
During the last year and a half, I have also heard countless
allegations about actually leveraging this cross ownership in
an anti-competitive manner. I have heard from small businesses
in Wisconsin local promoters and local radio stations
who talk about large radio and promotion companies tying in radio
and promotion services to push them out of business.
These local businesses are happy to compete in a free marketplace,
but when a company uses their cross ownership especially
using a public medium like radio in an anti-competitive
manner, it is simply unacceptable.
Some will argue that there are consumer benefits. For example,
they will often say that since 1996, there have been more formats,
or types of radio stations, in almost every market. But what
they won't tell you is that since many of these "formats"
are owned by the same out of state companies that they play the
same songs and they share the same news which actually
reduces consumer choices.
There are other disturbing ways in which the concentration
of ownership is changing what we hear on the radio. Singers,
musicians and managers have talked with my staff and with me
about some of the new and very daunting challenges they face
when trying to get their songs played on the airwaves. These
people are very concerned that playlists are no longer based
on quality -- subjective as that is -- but are sold to the highest
bidder instead. They told me how, in the past, if you couldn't
get a DJ to play your song in Cleveland, perhaps you could try
in Pittsburgh. And if the song was a hit in Pittsburgh, the Cleveland
DJ would probably hear about it.
I am told, Mr. Chairman, that doesn't happen any more. It
really can't. The same companies own the stations in both markets.
If they don't want to play a song, they don't - Anywhere. Opportunities
for artists to try their music "somewhere else" just
don't exist.
I've also been hearing about a new shakedown system, where
large radio stations allegedly require huge payments through
independent promoters before they'll put a song on the air. If
you don't have the money to play in this system, you are shut
out. Is this "pay-for-play"? If it isn't, I'd like
to know what is.
Consider also how the rise in ticket prices coincided with
the passage of the 1996 Telecom Act. More precisely, consider
that ticket prices went through the roof.
Before the Act was passed, ticket prices were increasing at
a rate that was slightly higher than the Consumer Price Index.
Since the Act became law, ticket prices have increased at a rate
that's almost 50 percentage points higher than the Consumer Price
Index.
Mr. Chairman, because of these concerns, I have re-introduced
legislation, the Competition in the Radio and Concert Industries
Act, which would address the levels of concentration, curb some
of the anti-competitive practices, and end the alleged new payola
system.
My legislation prohibits those who own radio stations and
concert promotion services or venues from leveraging their cross-ownership
to hinder competition in the industry. For example, if an owner
of a radio station and a promotion service hinders access to
the airwaves of a rival promoter or artist, then the owner would
be subject to penalties.
My legislation will also help to curb further concentration
that leads to these anti-competitive practices.
It would strengthen the FCC merger review process by requiring
the FCC to scrutinize the mergers of any radio station ownership
group that reaches more than 60% of the nation's listeners.
My legislation would also curb consolidation on the local
level by preventing any upward revision of the limitation on
multiple ownership of radio stations in local markets.
And finally, the bill would also prohibit the alleged new
payola system, where the big radio corporations are said to leverage
their market power to require payments from artists in exchange
for playing their songs.
These are not radical notions. All my legislation says is
let's first get a handle on consolidation and crack down on alleged
anti-competitive practices. Second, let's modernize our payola
laws to make sure all forms of payola are banned.
I hope that a lot of you will join me in cosponsoring this
legislation, but I also hope that this hearing will flush out
other issues that are leading to many of the concerns I have
been hearing.
Americans should be able to hear new and different voices,
and those voices deserve a place on the publicly-owned airwaves.
Radio is one of the most vibrant mediums we have for the exchange
of ideas and for artistic expression.
This public medium has long served the public good, and we
must ensure that it continues to do so. If we don't act now,
further concentration in the industry will guarantee that the
range of voices we listen for when we turn on the radio, the
voices of democracy that make radio unique, will continue to
fade away.
So thank you so much, Mr. Chairman, for holding this hearing
and I look forward to working with you, the ranking member and
and the other members of this committee.
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