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Media Ownership Hearing

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Media Ownership Hearing S. HRG. 108–903 MEDIA OWNERSHIP HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED EIGHTH CONGRESS FIRST SESSION JANUARY 30, 2003 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 95–894 PDF WASHINGTON : 2007 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 07:25 Feb 01, 2007 Jkt 095894 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\WPSHR\GPO\DOCS\95894.TXT JACKF PsN: JACKF COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED EIGHTH CONGRESS FIRST SESSION JOHN MCCAIN, Arizona, Chairman TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West Virginia KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts OLYMPIA J. SNOWE, Maine JOHN B. BREAUX, Louisiana SAM BROWNBACK, Kansas BYRON L. DORGAN, North Dakota GORDON SMITH, Oregon RON WYDEN, Oregon PETER G. FITZGERALD, Illinois BARBARA BOXER, California JOHN ENSIGN, Nevada BILL NELSON, Florida GEORGE ALLEN, Virginia MARIA CANTWELL, Washington JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey JEANNE BUMPUS, Republican Staff Director and General Counsel ROBERT W. CHAMBERLIN, Republican Chief Counsel KEVIN D. KAYES, Democratic Staff Director and Chief Counsel GREGG ELIAS, Democratic General Counsel (II) VerDate 0ct 09 2002 07:25 Feb 01, 2007 Jkt 095894 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\95894.TXT JACKF PsN: JACKF C O N T E N T S Page Hearing held on January 30, 2003 ......................................................................... 1 Statement of Senator Brownback ........................................................................... 17 Statement of Senator Burns ................................................................................... 12 Prepared statement .......................................................................................... 13 Statement of Senator Dorgan ................................................................................. 14 Statement of Senator Ensign .................................................................................. 15 Statement of Senator Hollings ............................................................................... 11 Prepared statement .......................................................................................... 11 Statement of Senator Hutchison ............................................................................ 70 Statement of Senator Lott ...................................................................................... 64 Statement of Senator McCain ................................................................................. 1 Prepared statement .......................................................................................... 1 Statement of Senator Smith ................................................................................... 82 Statement of Senator Wyden .................................................................................. 16 Article from The Wall Street Journal, dated February 25, 2002, entitled, From a Distance: A Giant Radio Chain is Perfecting the Art of Seeming Local ............................................................................................................... 73 WITNESSES Berman, Hon. Howard L., U.S. Representative from California ......................... 7 Feingold, Hon. Russell D., U.S. Senator from Wisconsin ..................................... 2 Prepared statement .......................................................................................... 5 Fritts, Edward O., President and CEO, National Association of Broadcasters .. 24 Prepared statement .......................................................................................... 26 Henley, Don, Recording Artists’ Coalition ............................................................. 33 Prepared statement .......................................................................................... 36 Mays, Lowry L., Chairman and CEO, Clear Channel Communications, Inc. .... 18 Prepared statement .......................................................................................... 20 Short, Jr., Robert, President, Short Broadcasting Co., Inc. ................................. 38 Prepared statement .......................................................................................... 40 Toomey, Jenny, Executive Director, Future of Music Coalition .......................... 47 Prepared statement .......................................................................................... 49 Prepared statement of Thomas F. Lee, President, American Federation of Musicians ................................................................................................... 56 (III) VerDate 0ct 09 2002 07:25 Feb 01, 2007 Jkt 095894 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\95894.TXT JACKF PsN: JACKF VerDate 0ct 09 2002 07:25 Feb 01, 2007 Jkt 095894 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\95894.TXT JACKF PsN: JACKF MEDIA OWNERSHIP THURSDAY, JANUARY 30, 2003 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 9:36 a.m. in room SR– 253, Russell Senate Office Building, Hon. John McCain, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA The CHAIRMAN. I tell the Members of the Committee we are waiting for three more Members to show up. In the meantime, per- haps in the interest of time, we could have Senator Feingold and Congressman Berman begin their opening statements. I may have to interrupt you. In fact, I hope I have to interrupt you, but please begin with your opening statement. Welcome Senator Feingold, Congressman Berman. Please proceed. [The prepared statement of Senator McCain follows:] PREPARED STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA Today, the Committee begins a series of hearings examining media ownership. Later this year, the Federal Communications Commission will act on a proceeding that addresses a number of different media ownership issues. These decisions will have a significant impact on the American media landscape. I have always been a firm believer in free market principles. I continue to believe that anachronistic government regulations that do not reflect today’s multimedia marketplace should be thoroughly reviewed by the FCC and repealed or modified wherever appropriate. Given the tremendous impact media can have in the every- day lives and thinking of Americans, however, we must approach these issues thoughtfully and it is important that the Committee hold hearings to better under- stand them. Today we will examine media ownership in the radio industry. After enactment of the Telecommunications Act of 1996, the radio industry saw unprecedented con- solidation. Several station owners began to purchase stations across the United States and the largest owner, Clear Channel Communications, has grown from 60 stations in 1996 to over 1,200 stations today. Many critics have voiced their con- cerns about radio consolidation and have alleged that some companies have been en- gaging in anticompetitive behavior. For instance, some have claimed that Clear Channel’s vertical integration with its entertainment division has hurt independent concert promoters and artists. Some artists suggest that their refusal to use Clear Channel’s promotion services has led to their music not being played on Clear Channel stations. I am concerned about these allegations and I look forward to hearing from the witnesses on these specific issues. Finally, I believe that, wherever possible, we should look to market-based ap- proaches to ensure there is diversity in media ownership. Later today, I will re-in- troduce the ‘‘The Telecommunications Ownership Diversification Act.’’ The bill pro- vides a tax deferral and other market-based incentives designed to ensure that our (1) VerDate 0ct 09 2002 07:25 Feb 01, 2007 Jkt 095894 PO 00000 Frm 00005 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\95894.TXT JACKF PsN: JACKF 2 tax laws do not disadvantage small businesses that may be owned by women and minorities who can help to further viewpoint diversity in media. I hope that other Members of the Committee will join me on this important legislation. STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR FROM WISCONSIN Senator FEINGOLD. Thank you very much, Mr. Chairman, for holding this hearing and my thanks also to the ranking Member, Senator Hollings, for holding this hearing to examine the effects of radio station ownership consolidation. I appreciated the conversa- tions I have had with both of you about this, and this is a very early time in the session to be able to bring up this issue, so I am grateful. I also want to thank Senator Dorgan for his leadership on this issue. If Congress had heeded Senator Dorgan’s warnings about the effects of consolidation on many of our communities, perhaps we would not have to be here today. Before I begin, I would ask, Mr. Chairman, that my full state- ment be allowed to be printed in the record. The CHAIRMAN. Without objection. Senator FEINGOLD. Let me start by saying that like I am sure all of you, I love radio. It brought baseball
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