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Clear Channel, the Monopoly

Clear Channel, the Monopoly

October 8, 2007 —

How big is too big?  For many people, that is the question regarding Clear Channel Communications, which owns over 1,200 radio stations in the United States and has been involved in a series of anti-trust lawsuits since the early 2000s.  In 2005, Clear Channel earned $936 million, much of it from the spinoff of its concert-management unit and the public sale of a stake in its billboard division. And though Clear Channel radio division is beginning to feel the challenge of satellite radio, the company’s influence on what music the public listens to is being felt across the country.

Prior to the Telecommunications Act of 1996, radio companies were limited to owning twenty AM and twenty FM stations. The Act only restricts the number of radio stations any one company can own in a local market (to eight), but does not limit the total number of stations one company can own. Since then, Clear Channel has grown to control approximately 1200 of the nation’s radio stations, 780,000 billboards and 35 TV stations (other major companies such as Viacom and Cumulus also own hundreds of radio stations).  As the company grew, it was also involved in a series of lawsuits charging anti-trust violations and anticompetitive tactics. Among the complaints in the various cases: the company limited radio airplay of artists who did not use its concert and promotion services.

Concerns regarding the control and influence of Clear Channel surfaced in recent years, especially after 9/11, when a widely circulated memo contained a list of suggested songs that station managers might want to consider too sensitive for listeners, including "Imagine" and "Peace Train." (During the controversy that followed, the company claimed that the list reflected the opinions of the executives who compiled it and did not constitute an official company blacklist.)  Clear Channel has been charged with anti-trust violations on a number of occasions. 

Do consumers have choices outside of Clear Channel?  Yes.  Besides satellite radio, which has more channels and fewer advertisements but expensive equipment and monthly service fees (satellite also does not have serve the public interest as local radio and does not abide by decency rules of the FCC), consumers can also try to tune into “low power” radio technology that serves short distances.  Unfortunately, Congress has passed legislation which limits this technology to rural areas and small towns.

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