Part III

            Deregulation The deregulation of radio and in particular the lifting of ownership caps has provided new opportunities for radio station ownership like never before. Along with this has emerged strategies to manage this new corporate structure on both the side of the owners of stations as well as the FCC. Radio has has long been viewed as a medium of immediate information, that requires little input to produce a quality program and is simple and economical to consume by listeners. Yet now, paralleling this deregulated environment is a growth in digital technology which provides an opportunity for even less human input, placing the mechanical control and management of these stations into virtual hands of computers. In addition, the economic demands, now experienced by the multiple ownership of stations lends itself toward centralized programming, in a medium with a historically established local tradition (McChesney R. 2001) (Bressers B. 2004).

         Most prevalent in the argument of those critical of deregulation is the theme of radio's role in serving the public interest especially given the lifting of ownership caps. Deregulation has been blamed as the cause of demise of localism in radio. Programming with local character such as local news, weather, and even entertainment, have been shown to be impacted by this trend. In addition, there is suggestion that the Emergency Alert System, which has a defined connection to a station's local responsibilities has also been effected. The derailment of a consist of anhydrous ammonia tank cars in Minot, North Dakota in January of 2002 and the dysfunctional operation of the local radio station, (all stations in the town owned by the same company) has become the hallmark of the problems with deregulation and its erosion of localism (Kidd D. 2004) (Staples B. 2003). Conversely however, in San Antonio, Texas, in June of 2004 a similar incident occurred where two trains collided and once again spilling deadly gas. However in this case, corporate radio supplied the warning in the San Antonio area. Had they learned their lesson from Minot or were they only acting out of the public interest, in as much as in this scenario, none of the stations that aired information on the event was given an official EAS warning. This was due to the fact that the EAS was never activated. Conversely, robotically controlled (corporate and non-locally owned) stations within the market of San Antonio, capable of sounding an EAS alert, never did so because their digitally controlled systems were never activated.

          The EAS, at best is multi-planked. At the onset of an event, public agencies actuate an emergency message, radio stations deliver the message, and the listening audience receive it. There is a melding of human responsibility within the operational structure of the EAS. On the side of radio, localism is a plank in the scaffold that supports this system. But likewise, public emergency management agencies and their officials must also be integrated into this structure.

           Localism Defined
"Localism is a Federal Communications Commission (FCC) policy fostering local radio or TV station outlets in as many U.S. communities as feasible" (Rush J. 1998 p. 241). The notion of localism is inferred in the Communications Act of 1934 and promotes the idea of "fair, efficient and equitable distribution of radio service" (1998). Parker cites Andrew Barrett, a former FCC commissioner, stating that localism is the "basic notion that the best practicable service to the public is rendered by the broadcaster who maintains close ties with the community served and who provides programming that responds to issues affecting residents of that community" (Parker E. 2003).

           Chains and the Treat to Localism Programming supplied by an out-of-area source is really nothing new. Local radio stations have been affiliated with networks since the thirties. Practically from its beginnings, the FCC has been concerned with the geographic saturation of radio outlets and their service; service that was tied to the needs of each unique locality. By the 1930s, although much of this programming was locally produced, it was the networks (Broholm J. 1998) that supplied national news and supplemented the station's local air time with other programming features (Center For Interactive Advertising 2000).

          In 1938 the FCC investigated network broadcasting or what was then called chain broadcasting, in the Report of Chain Broadcasting (Kahn F. 1984). The outcome of this report was a condemnation of the National Broadcasting Corporation (NBC) (Anderson C. 2004) and its control of two networks. However, this investigation amongst other things, looked at the impacts of "simultaneous broadcasting of an identical program by two or more connected stations; number of stations licensed to or affiliated with networks, the amount of time used or controlled by networks; the nature and extent of network program duplication, and the competitive practices of chain broadcasting" (Barrett M. 1998 p.71). Interestingly, many of these issues parallel the concerns of those who argue against the contemporary environment of deregulation. However, in the present deregulated era both corporate ownership programming strategies along with new technology have helped to facilitate the control of stations in both an economic and electronic context.
          The era of broadcast deregulation through the 1980s and later the Telecommunications act of 1996 ushered in the dissolution of ownership rules that before, limited owners to small numbers of stations in geographically defined markets. As a consequence of these new ownership rules a new operating structure to these stations has emerged. Corporate owned stations (networks as such, but certainly chains) such as those associated with Clear Channel, Infinity, Cox Radio, Entercom, ABC Radio, Citadel and others, are now found in almost every market in the U.S. In addition, a number of syndication services have emerged to provide competitive programming for stations not affiliated with large chains. Duopolies (multiple ownerships within markets) also take advantage of these centralized programming services. The advantage of centralized programming is an issue of economies of scale (Parker E. 2003) (McChesney R. 2001). Lee (Lee L. 1998) suggests syndicated programming provides a "cost effective" opportunity for a station to gain access to popular national programs (Viles P. and G. Foisie 1992). It is much more cost effective to produce one program that can be distributed to many stations. The down side of this strategy is the tendency for programming within a market to become less diversified (Block V. 2002) (Murphy H. 2001) (Block V. 2002).

           Managing With New Technology In addition to business strategies, technology has also contributed to easier consolidation of programming. Relative geographic location is a component of localism. However, beyond its locational geography the station must also attempt to serve the local needs of its community of location. Primarily this is achieved by programming. Unlike the 1930s when networks were predominantly wired together by telephone lines, today the satellite has revolutionized the dissemination of information. Along with satellites is the arrival of more sophisticated automation, which allows for the robotics operation of stations. These aspects combined with the opportunities of managing a large number of stations have worked together to contribute to the proliferation of corporate based programming. Even smaller radio duopolies can afford affiliating with several networks for different types of news, information, and entertainment programs" (Broholm J. 1998). Local Marketing Agreements (LMA) (Hagin L. 1998) are facilitated by the quick and easy distribution of programming through new digital technologies. Gabbert suggests that although automation and remote control of stations have been around long well before "...deregulation craze. The difference is that the small and some medium market stations had in house automation systems, not satellite fed. As early as the 1950s many FM's were automated. In fact some stations would have a telephone answering company get third class tickets and take the required transmitter readings at their switchboards" (Gabbert J. 2004). Bressers suggests that technology has also contributed towards the homogenizationof local news programming and technologies: "Satellite and broadband delivery now enables broadcast companies to generate programming from a central hub for distribution throughout the network of radio stations. Pieces of local information can be transparently spliced into generic news broadcasts, giving listeners the erroneous impression that local newscasters within their local communities generate the newscasts" (Bressers B. 2004). Thus, in the context of business strategy this new technology "can get better talent in a small market and conversely the argument for lack of localism can be made" (Gabbert J. 2004) (The marketing aspect of network talent is intensely competitive and translates into issues advertising exposure (Bachman K. 2003).)

            Making Technology Sound Local, Voice tracking Although centralized programming is mechanically not local,the importance of at least making it sound local seems to be an important component of programming strategy. Announcers that give time breaks in minutes past an hour rather than exact time, radio contest winners that are announced without the name of the town from which they are listening, are all signatures of satellite fed programming . However, voice-tracking technology attempts to mitigate the perception of non-local programming. Voice-tracking is essentially digitized components of an air talent's voice. Thus, introductions to music, programs, station ID's, weather, can all be voice tracked and inserted electronically into where it fits into the program. Parker states, voice-tracking allows stations that have computerized control the option of running personnel-free shifts for overnight and weekend shows (Parker E. 2003). Voice tracked shows can be produced in-house or be fed via satellite. The economic benefit to voice tracking is derived from the savings found in less time incurred in production and the need for fewer personnel. At the same time voice tracking provides the perception of a locally produced program.

             For Clear Channel this perceptual localism has been challenged in court. Matthews points out how Clear Channel Communications, using voice tracking, attempts to make their disc jockeys sound as if they are residents of the local area (Mathews A. 2002). In contrast Carpenter notes that "..when an announcer sitting in Los Angeles voice-tracks a shift for Boise, Idaho or Salem, Ore., the broadcaster has no relationship to the community" (Carpenter T. 2002). In 2003 the local sound of a voice tracked contest for Clear Channel Communications brought on an $80,000 law suit for the company in Florida in 2003. It was concluded that Clear Channel's voiced track promotion for the contest was so convincingly local, that it was misleading because it was not local (Kidd D. 2004 p.18).

            Uncapping Ownership A critical component of the localism issue surrounds the number of stations owned by corporate radio concerns. Hagin shows the progression of ownership from the hay days of radio to the era of current deregulations. In 1954 one company could control a total of 7 AM and 7 FM stations. In 1985 those ownership caps went to 12 AMs and 12 FMs. By 1992 the number rose to 18 AM and 18 FM and in 1994 20 and 20 (Hagin L. 1998). With the arrival of the Communications Reform Act of 1996 ownership issues were all but completely eliminated. Currently, the FCC's local radio ownership rules allows for one party to own up to 8 (not more than 5 in the same service of AM and FM modes) in stations with markets of at least 45 stations. In markets of 30 to 44 stations a party may own up to 7 stations with not more than 4 in the same service of AM and FM modes. In markets of 15 to 29 stations a party may own up to 6 stations with not more than 4 in the same service of AM and FM modes. In markets with less than 14 stations a party may own up to 5 stations with not more than 3 in the same service of AM and FM modes (Federal Communications Commission 2004).

           Although by the 1990s the trend toward complete deregulation of ownership caps as well as other regulation was well on its way it was still evident by a theme prevalent at the 68th annual convention of the National Association of Broadcasters that regulation was still there. In a provocatively title article, Regulation no longer a dirty word , Roy Stewart, Chief of Mass Media for the FCC stated that regulations would be "invoked only in the event competition was found to be failing as a means of protecting the public interest" (Anonymous 1990). Since then, in 2001 John Powell Chiarman of the FCC established the "Media Ownership Working Group (MOWG) and charged it with developing a solid factual foundation for re-evaluating FCC media ownership policies. The studies of the MOWG are intended to produce an "empirical basis for FCC media ownership policies that promote competition, diversity and localism in today's media market" (Federal Communnications Commission 2004). However, Chairman Powell states that his position over all is one of "reliance on deregulation and markets," and he is "convinced from a review of historical facts that the optimal environments for innovation and entrepreneurship are capital markets and free markets" (Hickey N. 2001). To some degree he suggests that that the issues surrounding ownership caps are really sentimental factors. In a press conference on 6 February 2001 Chairman Powell noted that: "Depending on whether you're a network or an affiliate, this cap is either vital to your continual survival or its removal is vital to your continual survival." He declared himself skeptical as to whether such ownership restrictions actually benefit consumers. "I think that's almost a romantic notion ... an emotional one" (Hickey N. 2001).

           Despite the seemingly bathetic character inherent in the argument of ownership, competition, and localism these issues continue to be at the pivotal point surrounding the regulate or deregulate debate. Early on, a strong opposition to the deregulation of ownership rules emerged from both public (Kelotra R. 2003) and private sectors. This opposition springs from issues on the distribution of music (Sharp C. 2002) to issues of diversity of programming (The Information Policy Institute, Tele-Information et al. 2003), (McCoy A. 2003). The FCC has responded to these discussions by initiating a task force on localism. FCC Chairman Powell began the task force in August of 2003 and since that time has heard input from public forums throughout the country. Chairman Powell states in part the rationale for this task force:

"It is important to understand that ownership rules have always been, at best, imprecise tools for achieving policy goals like localism. These include things such as public interest obligations, license renewals, and protecting the rights of local stations to make programming decisions for their communities. The Senate Commerce Committee recently held hearings and brought greater attention to the issue of localism in broadcasting. I applaud the Committee's efforts and hope to work in concert with them and the many Members of Congress who support localism," said Powell" (Federal Communications Commission 2004).

         Policy has contributed as fuel for this change. (An example of this is the drop of LMAs with the opportunities afforded in duopolistic structure (Zier J. 1994)) However, technology has provided an environment to call on economies of scale to take full advantage of these policy induced opportunities. The consequence is a mixture of business strategies. One that takes advantage of terminating on-air talent and supplementing it with centralized satellite programming (Murphy H. 2001), and others that don't cut staff but rather take advantage of the "real benefit to owing more than one station in a market and that is the sharing of price data and strategies" (Anonymous 1990). If, by chance a corporation owns all the stations in a market, such as Clear Channel Broadcasting Corporation does in Minot, North Dakota, this later strategy might be construed to be a local monopoly. Nevertheless, it is policy and technology that has melded together to produce the contemporary local radio airscape.

All parts to this research are copyright 2005 by Dr. M.Mustoe.
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