The Game of Radiopoly: An Antitrust Perspective of Consolidation in the Radio Industry

By Leeper, Sarah Elizabeth | Federal Communications Law Journal, March 2000 | Go to article overview

The Game of Radiopoly: An Antitrust Perspective of Consolidation in the Radio Industry


Leeper, Sarah Elizabeth, Federal Communications Law Journal


I. INTRODUCTION

The mass consolidation of the radio industry is a result of two recent developments: the enactment of the Telecommunications Act of 1996 (Telecom Act)(1) and the use of the 1992 Merger Guidelines(2) by federal antitrust enforcement agencies. This Comment explores current merger policy and its effect on the radio industry to determine whether consolidation continues to serve the public interest. The unique characteristics of radio as a scarce spectrum and forum of public expression raise concern as to whether a traditional antitrust analysis provides sufficient guidelines for regulation. Although there are numerous factors acting on the radio industry and it may be too early to determine the outcome of the current merger treatment, this Comment primarily examines the merger analysis employed by the federal antitrust enforcement agencies.

First, this Comment addresses the various roles of federal agencies in reviewing radio mergers and policy considerations underlying agency decisions. Second, this Comment examines economic and noneconomic factors of the 1992 Merger Guidelines used by the antitrust enforcement agencies. Third, this Comment discusses implications of the consolidation for the radio industry, including economic benefits and effects on diversity. Finally, in light of the fact that consolidation adversely effects the radio industry, this Comment notes forthcoming deregulation in the radio industry.

Amidst the record-breaking wave of mergers that has taken place during the Clinton administration, federal agencies have been faced with the task of reviewing a staggering number of proposed mergers.(3) The underlying movement pushing deregulation forward is well expressed by Vice President Gore's statement regarding mergers in the communication industry:

   "Competition is always better than monopoly. But monopoly power must never
   be confused with competition. Two enemies of competition are monopoly power
   and unwise government regulation. We must remember, after all, that the
   goal we seek is real competition. Not the illusion of competition; not the
   distant prospect of competition.(4)

In this line of thinking, Congress made a major overhaul of the regulation of the telecommunications market and the Telecom Act became law on February 8, 1996.(5) The Telecom Act's most significant effects in mass media occurred in the radio industry with the elimination of nationwide ownership restrictions and the liberalization of local ownership caps under sections 202(a) and 202(b)(1).(6)

II. AGENCY REGULATION OF RADIO CONSOLIDATION

A. Consolidation of the Radio Industry

Beginning in 1985, the Federal Communications Commission (FCC) relaxed radio ownership limits to increase competition and diversity in the radio industry.(7) These effects have been even more dramatic with the Telecom Act,(8) where the radio industry has experienced tremendous consolidation and the number of radio station owners has dropped significantly. The number of radio station owners has declined 11.7%; whereas the number of radio outlets has dropped 2.5%.(9) The decline in radio station owners is the result of a vast amount of trading.(10) In 1996 alone, 2066 radio station transactions were made, comprising about 20% of the total number of stations.(11) In 1996, $2.84 billion were spent in radio transactions and in 1997 another $2.46 billion were spent.(12) Although 1998 radio transactions have decreased, they continue to represent a healthy revenue of roughly $1.6 billion, a slight decrease from dollars spent in 1996 and 1997.(13)

Three years after the Telecom Act, industry participants expect that the radio consolidation boom will shortly come to an end.(14) Others project that if consolidation continues it will involve mostly smaller markets.(15) In 1998, the market experienced an overall decrease in FM station transaction revenues; although there was a sixty-five percent increase in the sale of AM stations. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Game of Radiopoly: An Antitrust Perspective of Consolidation in the Radio Industry
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.