- Can you name a Texas-based multinational company that
is facing a Department of Justice investigation, lawsuits for inappropriate
business practices, a flurry of criticism in the mainstream press, and
a bill in congress to curb its impact on the industry?
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- Did you say Enron? Try again.
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- This 800 lb. Texas gorilla has spent $30 billion since
1996 to become the world's largest radio broadcaster, concert promoter,
and billboard advertising firm. It's a major player in American television
and Spanish-language broadcasting.
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- Clear Channel Communications of San Antonio may not be
a household name yet, but in less than six years it has rocketed to a place
alongside NBC and Gannett as one of the largest media companies in the
United States. The mega-company has gained a reputation for its ugly hardball
tactics. Clear Channel has played a leading role in destroying media diversity
in the United States. And yes, it is the same media company that allegedly
"blacklisted" certain songs following September 11, including
Cat Stevens'
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- Peace Train and John Lennon's It's not just how big and
powerful they are but how they do business, the arm twisting," Mike
Jacobs, former independent label owner and manager of Blink 182, told Eric
Boehlert who has been covering Clear Channel's shady business practices
for Salon.com. Media Mobster. Before passage of the 1996 Telecommunications
Act, a company could not own more than 40 radio stations in the entire
country. With the Act's sweeping relaxation of ownership limits, Clear
Channel now owns approximately 1225 radio stations in 300 cities and dominates
the audience share in 100 of 112 major markets. Its closest competitors
-- CBS and ABC, media giants in their own right -- own only one-fifth as
many stations.
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- Accusations abound that Clear Channel illegally uses
its dominance in radio to help secure control of the nation's live entertainment
business. Several cities, including Denver and Cincinnati, have charged
radio station managers with threatening to withdraw certain music from
rotation if the artists do not perform at a Clear Channel venue. This tactic,
known as "negative synergy," has allegedly been used to pressure
record companies into buying radio-advertising spots in cities where they
want to book concert venues.
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- With this anti-competitive tactic of leveraging airplay
against concert performances, Clear Channel has firmly solidified its hold
in both areas. As a result, Clear Channel now owns, operates, or exclusively
books the vast majority of amphitheaters, arenas, and clubs in the country.
It also controls the most powerful promoters, who last year sold 27 million
concert tickets. That is 23 million more than the closest competitor.
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- While this may be good for Clear Channel owners and investors,
a lot more is at stake here than the buying and selling of stocks.
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- "Profit maximization has never been the sole point
of U.S. communications policy," writes Douglas Gomery in a March 2002
white paper for the Economic Policy Institute.
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- "Under the Communications Act of 1934, the Federal
Communications Commission (FCC) is charged with allocating spectrum space
to maximize 'the public interest'...and to encourage a diversity of voices
so as to promote a vibrant democracy." Far from fostering a diversity
of voices, Clear Channel's monopolistic practices are accelerating the
homogenization of our airwaves. The company syndicates both Rush Limbaugh
and Dr. Laura to hundreds of stations nationwide, shuts out independent
artists who can't afford to go through high-priced middlemen, and is responsible
for taking the practice of voice tracking to new heights (or depths, depending
on your perspective).
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- Voice tracking is the practice of creating brief, computer-assisted
voice segments that attempt to fool the listener into thinking that a program
is locally produced, when in fact the same content is being broadcast to
upwards of 75 stations nationwide from a central site. So you have one
overworked 'radio personality' recording the phrases, "Hello Topeka!"
"Hi Springfield!" "How you feeling Oakland?" all day
long.
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- This consolidation is clearly counter to the Federal
Communications Commission's (FCC) mandate to encourage media diversity.
Now, however, the long-standing concerns of media activists are being echoed
by the mainstream press, the courts regulatory agencies, and even by members
of Congress.
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- Mega-Monopoly
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- Clear Channel is currently facing antitrust lawsuits
from plaintiffs around the country, ranging from an Illinois concert goer
concerned with soaring ticket prices to the nation's largest Latino-owned
radio company.
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- Alleging monopolistic behavior, however, is not the same
as convincing a judge to move towards a trial. But last summer a small
Denver-area concert promoter, called Nobody in Particular Presents, sued
the media behemoth for antitrust violations, claiming that it "has
used its size and clout to coerce artists... to use Clear Channel to promote
their concerts or else risk losing airplay." The judge agreed to hear
the case, and ruled that the evidence is "sufficient to make a case
of monopolization and attempted monopolization under Section 2 of the Sherman
Act."
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- As a result, the halo of silence surrounding the company's
anti-competitive practices may finally be shattered. Plaintiff's lawyers
will be able to compel music industry insiders to testify regarding the
often-repeated, off-the-record allegations that Clear Channel's radio stations
have illegally rewarded or punished artists based on their dealings with
the company's concert division.
- The political terrain is really shifting," says
Robert McChesney, author and professor of communications at the University
of Illinois, Urbana-Champaign. "There's an opportunity for discussion
about radio that would have been unthinkable six months or a year ago,"
he told Randy Dotinga in Wirednews.com.
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- Irregular Regulators
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- Despite a clear history of promoting consolidation, the
Department of Justice and the FCC, the federal regulatory agencies charged
with safeguarding the public interest in business and media respectively,
are finally showing a spark of interest in holding Clear Channel accountable.
While the Justice Department is spearheading its own "top secret"
investigation of Clear Channel, the FCC has been mostly dragging its heels,
with three notable exceptions:
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- After receiving numerous complaints from across the
country, the FCC has announced it is investigating the claims by an advertiser
in Chillicothe, Ohio, that Clear Channel is circumventing existing ownership
limits by operating stations through shell companies in a practice known
as "parking" or "warehousing" stations. Clear Channel
has sold off stations to alleged front companies, which allow Clear Channel
to continue operating the properties while also providing an easy way to
buy back the stations, should the FCC slacken ownership limits in the future.
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- In Charlottesville, Virginia, the FCC has preliminarily
denied a station transfer to Clear Channel and has scheduled a formal hearing
to examine the situation. Big deal? Yes, because the FCC has not taken
such an action since 1969 -- which, more than anything else, speaks to
the FCC's lack of policy enforcement over the last thirty years and is
one of the reasons why we have arrived at the current situation.
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- In Monterey, California the FCC has held up another
Clear Channel transfer request at the urging of Congressman Sam Farr (D-Calif.).
Congress Catches on to " Shady Practices"
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- Fortunately, Farr is not alone in expressing concern
over Clear Channel's shady business practices. He is joined by a handful
of other vocal members of Congress, including Senator Russ Feingold of
Wisconsin, who has proposed a bill to deal with the issue. Known for his
work on campaign finance reform, Feingold launched the Competition in Radio
and Concert Industries Act last June, saying: "We need to repair the
damage that has been done through this anti-competitive behavior..."
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- Without naming names, the Act takes direct aim at some
of Clear Channel's business practices, such as the warehousing of stations
for future purchase, "negative synergy" with concert promotions,
and pay-to-play schemes between station owners and record companies. Consumer
groups, minority-owned radio companies, labor unions, and independent artists
have all thrown their support behind the Feingold bill.
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- And not a moment too soon. The growing momentum to hold
Clear Channel accountable for its excesses comes as the FCC -- chaired
by Michael Powell, son of Secretary of State Colin Powell -- announced
that it will review the last remaining protections on media diversity.
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- FCC's Proposed Rules on Ownership
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- On September 12 the FCC announced a proposed Rulemaking
on Ownership. Dubbed the Omnibus Ownership Ruling by consumer advocates,
it could be the final nail in the coffin of media diversity and the public
interest. Under Powell's direction, and with a huge push from mega-media's
deep-pocketed lobbyists, the Omnibus Ruling lumps together a number of
disparate proposals bound by the same core principle of eliminating the
last public interest protections in media ownership.
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- The Campaign
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- Clear Channel epitomizes the disastrous consequences
of hyper-consolidation that resulted from the 1996 Telecom Act; a disasterthat
activists say would further accelerate if the FCC implements the Omnibus
ruling. They also see the Ruling as an opportunity to spot light the need
for democratizing the media.
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- The current rumblings in Washington, D.C. regarding Clear
Channel are the direct result of many years of citizen agitation and organizing
from the grassroots that continue to grow.
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- Unionists and their allies have rallied in Seattle, Cleveland,
and other cities. Community coalitions that hold Clear Channel accountable
for the negative effects of over consolidation have emerged in Detroit
and San Francisco. Letter writing campaigns have urged elected officials
to reign in the company and make policy changes to protect the public interest.
<http://www.clearchannelsucks.org/>clearchannelsucks.org and <http://www.stopclearchannel.com/>stopclearchannel.com
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- What's been sorely lacking is strategic coordination
of these efforts to amplify their impact and link up with broader media-policy
initiatives. A dynamic national coalition launched just such a campaign
at the recent Reclaim the Media Conference, in Seattle during the weekend
of September 12-15, 2002. Nationally recognized organizations such as FAIR,
the Democratic Media Legal Project, Media Alliance, and Prometheus Radio
Project began mapping out steps to mobilize public pressure around Clear
Channel, the Feingold bill, the Omnibus Ruling, and beyond.
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- media-alliance.org. For more ideas see What You Can do
About Clear Channel.
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