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Feature: The History of LPFM
Part 5

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The Telecom Act of 1996

In 1996, Congress completely revamped the Telecommunications Act - the federal laws that govern every method of communication in America. It was a job that hadn't been comprehensively done since 1934, and the emergence of new communications technologies (primarily the Internet) spurred the government into the activity of updating these rules and regulations.

However, the Telecom Act of '96 was also hog heaven for special interests - especially broadcasters.

Much of the prime-time spotlight focused on the largest piece of pork: a multi-billion dollar allocation of broadcast spectrum - for free - to licensed TV stations for the upcoming digital television (DTV) service.

In the event of two competing applicants for one open broadcasting frequency in a market, the FCC usually gives the license to the highest bidder. By giving existing license holders all the existing DTV space, it effectively guaranteed the status quo on the media landscape (with crisper pictures and sound). At the time, it was a mind-boggling piece of corporate welfare.

It hardly made the news.

The radio industry made off with a nice slice of pork of its own - the previous Telecom Act only allowed one company to own a maximum of two radio stations per market, and a maximum of 20 stations nationally. In the 1996 Act, that maximum cap was raised to eight stations per market, and the national cap was abolished.

A wave of consolidation ensued, the likes of which no communications industry has seen before or since. Companies devoured one another, growing and growing until 1999 - where one company legally owned more than 700 radio stations nationwide. In 2004, the largest radio conglomerate, Clear Channel Communications , owns more than 1,200 stations.

Consolidation has proved quite lucrative for radio broadcasters. With more stations to sell under one roof, they close larger advertising contracts for package deals across stations and markets. And since there's less competition, ad rates have gone up.

In order to maximize profits, radio conglomerates have "streamlined" operations. This meant the firing of all "duplicate" employees.  The first positions on the chopping block were the talent - the people on the air in every station, in every community, who gave each individual station its personality.

The local talent was replaced by cheaper alternatives, namely computer automation and syndicated programming. News departments were the most decimated because they cost so much for such a little slice of programming time.

On a music station, it is now possible for a "DJ" to go into a studio, speak words into a computer, and have the computer place the "voice tracks" in between songs where appropriate - to give the appearance of being live on the air.

Complaints began to crop up among the listening public that radio was beginning to sound the same, and they were right.  It's because the hometown radio station no longer existed in most markets. In fact, it is now possible to listen to stations in communities separated thousands of miles apart and not be able to tell much difference between them.

Because of this, radio stations lost their most important attribute - their connection to the communities they served. One of the things that made radio such an effective tool of mass communication was its localism. While de-humanizing has left the radio industry full of cash, it's an empty shell of what it once was.

Next page --> Telecom Backlash and the Second Rise of LPFM -->
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