The Telecommunications Act Of 1996

[Shaka Zulu]

This week, the A.V. Club notices the anniversary (so to speak) of the Telecommunications Act of 1996, and the effect it's had on American media since it was passed and implemented. Of course, said effect has been negative:

• Lifted the limit on how many radio stations one company could own [and] made possible the creation of radio giants like Clear Channel, with more than 1,200 stations…

• Lifted from 12 the number of local TV stations any one corporation could own, and expanded the limit on audience reach… These changes spurred huge media mergers and greatly increased media concentration.

• Deregulated cable rates. Between 1996 and 2003, those rates have skyrocketed, increasing by nearly 50 percent…

• Permitted the Federal Communications Commission to ease cable-broadcast cross-ownership rules... Ninety percent of the top 50 cable stations are owned by the same parent companies that own the broadcast networks, challenging the notion that cable is any real source of competition.

Even worse, as everybody has probably noticed, is what's happened to music:

When the Telecom Act lifted the limit of radio stations one company could own, it not only created a climate for mega conglomerates like Clear Channel, it also contributed to the insane slide the music industry has experienced over the past 20 years. If a station in Detroit, for instance, is owned by Clear Channel, the company sets the playlist, not the average DJ. That creates less diversity over the radio waves, especially if the same corporation owns a large group of stations in one town. In essence, if a Chicago pop station is playing a lot of Britney Spears, it’s because CBS—the corporation that owns a number of radio stations in Chicago—likes Britney Spears, not because one dude in the music department is into “Toxic.” And if Chicago’s pop station is playing Britney Spears, then she’s going to get airplay at the adult contemporary station in the same network in a few months or years, and she’s going to be getting similarly heavy airplay all across the country at all CBS’ stations.

But what’s wrong with Britney Spears? Nothing, really, unless you’re some upstart pop diva who just wants a single broadcaster to give her a chance. Or you’re an alt-rock radio station that wants to stay afloat by selling ads but can’t really compete with Clear Channel’s army of salespeople who have access to all manner of radio stations at once, making their deals the best in town. Or you’re a listener in Toledo who doesn’t realize that their beloved drive-time DJ isn’t actually in Toledo at all, but instead recorded his or her song segues and chatter from some booth in Dallas, where they’re being paid a couple thousand dollars more to put in some extra hours by pretending to care about—or even know about—a city they’ve maybe never been to. And yes, that happens. A lot. As communications scholar Robert McChesney told The A.V. Club:

If you went to a Clear Channel office in Peoria, Illinois or Toledo, Ohio, where [the company owns] eight stations or six stations, you could go into one floor of an office building where they were located and there would be a large closet for each of their stations, and they’d all be automated out of Texas. There would be one ad sales staff to sell all these stations locally, but a lot of the programming would be done out of a central headquarters.​

He also says that radio is “by far the most democratic medium because it’s very inexpensive to produce a good quality radio signal,” noting that “every community could [perceivably] have 30, 40, 50 local stations run by people from the community both for profit and not.”

And you also get shitty cable, Internet, and cell phone service as well:

As Common Cause notes, the Telecom Act Of 1996 also helped deregulate cable rates, meaning that the act is the reason you’re paying $100 a month for what you could probably get online for “free” if you were just willing to sit through a few Honda ads. That kind of deregulation can seem confusing for those who advocate for the free market. Why, for instance, couldn’t some company decide to offer cable to a town or region at a fraction of the cost of what Time Warner might charge? Let McChesney explain:

The principle behind the ’96 act was, “Well, we created all these cable monopolies [before 1996] because you can only have one company ripping up the roads and putting in their cable wires… The ’96 act was when the internet was going to change everything, so [the thought was that] now telephone companies can use their wires to transmit television shows. Suddenly, [the thought was] we’ll have at least two companies in every market competing… and then [people] said, “If those guys can do it, maybe the electric utility can send stuff over the electric wires, and pretty soon we’ll have wireless companies who will utilize new technologies, so there can be all sorts of people competing. [In reality,] their wires weren’t as good and there wasn’t enough money in it.

At this point, it’s just not economically feasible or smart to set up a cable television operation, meaning more companies are either resorting to using satellite dishes or just focusing on streaming, à la Hulu (a company that’s jointly owned by NBCUniversal, Fox, Disney, and Turner Broadcasting, by the way) or iTunes. Now, as Common Cause notes, “Roughly 98 percent of households with access to cable are served by only one cable company,” and that company can pretty much charge what it wants. That’s especially true if that company is able to offer more and more channels—all generally owned by the same five parent corporations—thus giving the cable provider reason to claim that, since it offers more than what you might get on regular old broadcast TV, it can charge more. And like idiots, we all pay it, because that’s what cable costs.

The Telecommunications Act Of 1996 gave us shitty cell service, expensive cable


For myself, I believe that what people consider good music (rock music) could come back to the public if this Act was scrapped and the old regulations were brought back to limit how many stations a media conglomerate could own. Likewise, all of the big cable/Internet/cell phone bill people get would be less, and TV news would be better, and the ripple effects into Canada (which IMHO was also affected by the Act) would be positive.

What do others think?

 

[Owain Taggart]

Agreed. Might even encourage competition between stations and give more of a chance to smaller local acts, and award shows would make more sense. At least the CBC in Canada has been doing a bit more of that by putting aside time to showcase local acts. And the local music festival that we have has helped a lot too.

 

[Random_Spock]

I agree. Some competition would be nice to see instead of these ridiculous conglomerates coming around and making it so people aren't able to pick and choose what company to go with (mainly in regards to cable, etc.).

 

[JirinPanthosa]

Yeah, media consolidation is what forced all the creativity out of mainstream and into the indie scene.

 

[Owain Taggart]

And actually, to add a bit to my previous comment, the CBC actually done a lot to give individuality and personality to some of its shows. For instance, Randy Bachman (Of BTO and The Guess Who) has his own radio show and brings his depth of knowledge and experience to the forefront. He doesn't just put a playlist together. He actually puts some thought into it and always gives context as to why he's doing it, telling stories with historical perspective and personal annecdotes. He's the kind of guy we need more in the industry, not less. He's probably one of their biggest assets right now.

There's also another show they have where they have musicians from around the industry putting together a playlist of their favourite songs.

 

[Spot's Meow]

I agree, I think something needs to change or the problems will only get worse.

Although the issues in the music/radio industry concern me, I think it's the cable operators that are the biggest problem. The music industry, at least, has found other avenues for getting music out there. Hardly anyone I know listens to the radio anymore, it's becoming more and more irrelevant. The switch to streaming/downloading online has been a relatively quick transition and although there are certainly problems with that as well, it has at least allowed ways for those who would have typically gained exposure through the radio to now do so online.

But cable is a different story. As the article said, it's too difficult for others to break into the industry and therefore even with the supposed "free market" we end up with only one or two choices, both ridiculously expensive. It really should be regulated as any other utility would be. Of course, it could be argued that it shouldn't be regulated in that way because it is a luxury rather than a necessity. And it's true.

This is why the channel and cable owners should be pushing for regulation, because if they don't they will eventually become irrelevant as well. The switch to streaming television has been slower than for music, but it is happening. I haven't paid exorbitant cable prices for a couple of years now, opting instead for watching free shows online, subscribing to a couple of cheap services, and buying a Chromecast. A few years ago only the most tech-savvy could successfully pull off cord-cutting (and still get to watch the shows they want). Now it is easier and more people are able to do it. Soon enough, Google and Netflix and Apple and whoever else comes along will make the experience even more user friendly, so that even your 80-year old grandma can just buy a TV, plug in something in place of her antenna, make a couple of clicks, and stream all the content she wants for much more reasonable prices than buying a cable package. Similar to how my grandma didn't understand streaming music at all a few years ago but now knows how to get what she wants from iTunes almost immediately.

Radio and cable will no longer be as relevant or lucrative, and the big corporations will have deregulated themselves out of business. At least, out of that business. Then we'll be paying exorbitant prices for streaming services and devices...but at least that's a market that's easier to break into, and allows for more competition.

 

[Kor]

I think I read the Telecommunications Act forward and backward back when I was doing media studies in college. Then I promptly forgot it all.

Anyway, I rarely ever listen to commercial radio. I listen to music-related podcasts, or I go to record stores and try to find something new and different, rather than subjecting myself to the 90% of manufactured dreck to which Sturgeon's Law applies.

Kor

 

[Scout101]

Big issue being the more cords you cut, the more you're dependent on high-speed internet. So cable prices go up a little, but what they charge for internet keeps going up quickly. Eventually you'll have the same bill you used to have, but no tv service to show for it.

Need to break up the providers and force competition. Second FIOS got to my area, cable started being more willing to negotiate or offer perks. Add a couple more companies into the mix, and you'll get real competition.

 

[Shaka Zulu]

Big issue being the more cords you cut, the more you're dependent on high-speed Internet. So cable prices go up a little, but what they charge for Internet keeps going up quickly. Eventually you'll have the same bill you used to have, but no TV service to show for it.

Need to break up the providers and force competition. Second FIOS got to my area, cable started being more willing to negotiate or offer perks. Add a couple more companies into the mix, and you'll get real competition.

I agree with this, and also hope that the effects of said moves radiate into Canada as well.

I agree, I think something needs to change or the problems will only get worse.

Although the issues in the music/radio industry concern me, I think it's the cable operators that are the biggest problem. The music industry, at least, has found other avenues for getting music out there. Hardly anyone I know listens to the radio anymore, it's becoming more and more irrelevant. The switch to streaming/downloading online has been a relatively quick transition and although there are certainly problems with that as well, it has at least allowed ways for those who would have typically gained exposure through the radio to now do so online.

But cable is a different story. As the article said, it's too difficult for others to break into the industry and therefore even with the supposed "free market" we end up with only one or two choices, both ridiculously expensive. It really should be regulated as any other utility would be. Of course, it could be argued that it shouldn't be regulated in that way because it is a luxury rather than a necessity. And it's true.

This is why the channel and cable owners should be pushing for regulation, because if they don't they will eventually become irrelevant as well. The switch to streaming television has been slower than for music, but it is happening. I haven't paid exorbitant cable prices for a couple of years now, opting instead for watching free shows online, subscribing to a couple of cheap services, and buying a Chromecast. A few years ago only the most tech-savvy could successfully pull off cord-cutting (and still get to watch the shows they want). Now it is easier and more people are able to do it. Soon enough, Google and Netflix and Apple and whoever else comes along will make the experience even more user friendly, so that even your 80-year old grandma can just buy a TV, plug in something in place of her antenna, make a couple of clicks, and stream all the content she wants for much more reasonable prices than buying a cable package. Similar to how my grandma didn't understand streaming music at all a few years ago but now knows how to get what she wants from iTunes almost immediately.

Radio and cable will no longer be as relevant or lucrative, and the big corporations will have deregulated themselves out of business. At least, out of that business. Then we'll be paying exorbitant prices for streaming services and devices...but at least that's a market that's easier to break into, and allows for more competition.

The radio industry collapsing completely might not be all bad; we might get people who will buy up whatever radio stations that will have become abandoned (and hopefully will be cheap enough to buy up) and run them with love and care for radio and for music, like this young lady wanted to. Likewise for terrestrial over the air TV and (maybe) cable.

I too have cut the cord, and now only watch TV shows (and movies) on Netflix (I still buy movies on Blu-Ray DVD because I like to do so.)

 

[Scout101]

Digital TV was supposed to open up that frequency band for OTA broadband, especially in rural areas. When does that show up? Kinda feel like they did step 1, forgot step 2...

And that's one where you get the government to step in (or tightly regulated partnership) and offer broadband at cheap prices. Won't be FIOS-fast, but if you're getting essentially LTE speeds OTA, the rest have to step up big time or lower prices to stay afloat.

Internet is becoming a necessary commodity. It's replaced most news, majority of the mail service, phones, tv/entertainment, need it to apply for jobs, for school, etc. Even if it's a little on the slow side, if it can be put out and compete with the big boys by undercutting price (or free as part of taxes), it would be a game changer.

 

[Shaka Zulu]

Digital TV was supposed to open up that frequency band for OTA broadband, especially in rural areas. When does that show up? Kinda feel like they did step 1, forgot step 2...

And that's one where you get the government to step in (or tightly regulated partnership) and offer broadband at cheap prices. Won't be FIOS-fast, but if you're getting essentially LTE speeds OTA, the rest have to step up big time or lower prices to stay afloat.

Internet is becoming a necessary commodity. It's replaced most news, majority of the mail service, phones, tv/entertainment, need it to apply for jobs, for school, etc. Even if it's a little on the slow side, if it can be put out and compete with the big boys by undercutting price (or free as part of taxes), it would be a game changer.

As I implied before, we still need radio (especially small towns like this one that needed it during a disaster) and the way radio is now won't cut it. Also, as amazing as the Internet is, it's still too expensive for low-income people to afford (especially when you figure in the cost of a decent TV set/monitor and computer into the mix.) We also need for this Act to die so that newspapers and TV/radio news staff don't get destroyed by greedy conglomerate cutbacks (under the guise of 'the Internet's doing this to us') to maximize more profit, as is happening now.

I think I read the Telecommunications Act forward and backward back when I was doing media studies in college. Then I promptly forgot it all.

Anyway, I rarely ever listen to commercial radio. I listen to music-related podcasts, or I go to record stores and try to find something new and different, rather than subjecting myself to the 90% of manufactured dreck to which Sturgeon's Law applies.

Kor

You shouldn't give up on radio completely, Kor; there are still stations out there that don't play commercial pop/classic rock and nothing else, like these:

Indie 88
Triple J
Exclaim! (plus the music video channel on YouTube)