DePaul Journal of Art, Technology & Intellectual Property Law Volume 12 Issue 2 Fall 2002 Article 6 Clear Channel v. Competition Act of 2002: Is There A Clear End in Sight? Sarah Greene Follow this and additional works at: https://via.library.depaul.edu/jatip Recommended Citation Sarah Greene, Clear Channel v. Competition Act of 2002: Is There A Clear End in Sight?, 12 DePaul J. Art, Tech. & Intell. Prop. L. 387 (2002) Available at: https://via.library.depaul.edu/jatip/vol12/iss2/6 This Legislative Updates is brought to you for free and open access by the College of Law at Via Sapientiae. It has been accepted for inclusion in DePaul Journal of Art, Technology & Intellectual Property Law by an authorized editor of Via Sapientiae. For more information, please contact [email protected]. Greene: Clear Channel v. Competition Act of 2002: Is There A Clear End in LEGISLATIVE UPDATE CLEAR CHANNEL V. COMPETITION ACT OF 2002: IS THERE A CLEAR END IN SIGHT? I. INTRODUCTION Senator Russell Feingold (D-WI) recently introduced a new bill to amend the Communications Act of 1934, entitled 'the "Competition in Radio and Concert Industries Act of 2002" ("Competition Act").' The Act is -designed to "increase programming and content on radio that is locally and independently produced, to facilitate competition in radio programming, radio advertising, and concerts, and for other purposes."' The Competition Act aims to reverse the negative 1. S. 2691, 107th Cong. (2002), available athttp://thomas.loc.gov. 2. The full text of the Act is as follows: "Competition in Radio and Concert Industries Act of 2002-Amends the Communications Act of 1934 to authorize the Federal Communications Commission (FCC) to revoke any broadcast station license of construction permit for: (1) willful and repeated unfair or deceptive acts or practices that significantly hinder or prevent the broadcast of programming or content produced, promoted, or created by a person independent of the licensee or permittee; or (2) conviction or final adjudication of an antitrust unfair trade practice violation regarding concert venues or promotion. Directs the FCC to prescribe regulations which address: (1) improperly influencing the sale of satellite cable programming or content to any other radio station or unaffiliated concert venue, or of any song, work, or sound recording, programming, concert performance, or concert promotion to persons not affiliated with the licensee, permittee, or affiliate thereof; (2) discrimination against unaffiliated musicians or content providers; and (3) the making of exclusive contracts with musicians or providers which prevent other licensees or permittees from obtaining programming or content from such musicians or providers. Requires the FCC to: (1) designate for hearing any radio broadcasting application that would result in the applicant owning, operating or controlling radio stations having a national audience reach exceeding 60 percent; (20 review 387 Published by Via Sapientiae, 2016 1 DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 12, Iss. 2 [2016], Art. 6 DEPAUL J. ART. & ENT. LAW [Vol. XII:387 effects of the Telecommunications Act of 1996 ("Telecom Act"). Specifically, the Competition Act would direct the Federal Communications Commission ("FCC") to (1) heavily scrutinize future mergers; (2) revoke licenses of radio stations that use tying arrangements between radio, promotion or concert industries to discriminate against artists, concert promoters or other radio stations; (3) investigate "pay-for-play" ("payola") practices; (4) probe whether soaring concert ticket prices can be attributed to massive media consolidation; and (5) determine whether the combined effects of these practices have affected the strength of diversity, localism and consumer approval in the radio and concert industries? Although the Competition Act has won support from record labels, artists, independent radio station owners and consumers, the Act will face a tough battle against well- established industry practices, big radio money funneling into the hands of GOP policy makers and proponents of further deregulation, including the FCC's chair Michael Powell.4 the use of privately-controlled audience measurement systems for the determination of local markets of radio stations; (3) modify its rules concerning attributable interests in radio stations and limitations on local marketing agreements; and (4) prohibit the licensee of any radio station from using its control over broadcasting matter to extract money or other valuable consideration from a record company, artist, concert promoter, or related entity. S. 2691, 107th Cong. (2002). 3. Bill Holland, Feingold Introduces Competition Bill. BILLBOARD, July 6, 2002, at 9 [hereinafter Holland, Feingold Introduces Competition Bill]. 4. Id.; Feingold states, "Ihear about these problems everywhere I go. People are very concerned." Other supporters include: "Jenny Toomey, indie recording artist and executive director of the Future of Music Coalition; Greg Hessinger, executive director of the American Federation of Television and Radio Artists; Jim Winslow, executive director of the National Association of Black Owned Broadcasters; and Gene Kimmelman, executive director of Consumers Union. The National Association of Recording Arts and Sciences, the Recording Artists Coalition, and the Recording Industry Association of America (RIAA) also support the measure. Future of Music Coalition, FMC Joins Broad Artist Coalition in Letter to FCC and Congress on Current Issues in Radio, (May 24, 2002); In a joint statement to Congress and the FCC, the following groups support reform in current payola practices and investigation into the impact of radio consolidation: the American Federation of Musicians, American https://via.library.depaul.edu/jatip/vol12/iss2/6 2 Greene: Clear Channel v. Competition Act of 2002: Is There A Clear End in 2002] CLEAR CHANNEL 389 This paper will include a background section illustrating the legislative history leading up to the Telecom Act. The background section will demonstrate the effects of the Telecom Act within the communications industry, specifically addressing payola and the FCC's response to those effects. This paper will specifically highlight Clear Channel Communications and Clear Channel Entertainment ("Clear Channel"), which as a result of the Telecom Act's relaxation of ownership limits, has in just six years become the most dominant radio and concert conglomerate in the world. The analysis section will address how the Competition Act aims to rectify the alleged problems in both the radio and concert industries. Finally, in support of the Competition Act, the impact statement will address the current state of radio and concert industries; in particular, how public policy goals such as diversity and localism, have all but disappeared in the minds of legislators and big conglomerates such as Clear Channel. In effect, these industries eagerly submit to the whims of those who have money, irregardless of whether quality programming dwindles to more and more homogenous, cookie-cutter rock and pop. Additionally, this section will address the Act's likelihood of passage, weighing both Clear Channel's political ties to Washington and the FCC's chairman, Michael Powell's, pro-deregulatory outlook. Efforts in support of the Competition Act are notable, yet without overwhelming legislative support, artists willing to stand in opposition to huge radio conglomerates and lobbying money, stations will continue to spoon-feed listeners the same money- driven songs over and over again. II. BACKGROUND The purpose of this section is to explore the legislative history, Federation of Television and Radio Artists, Association for Independent Music, Future of Music Coalition, Just Plain Folks, Nashville Songwriters Association International, National Association of Recording Merchandisers, National Federation of Community Broadcasters, Recording Academy, Recording Industry Association of America, at http://www.futureofmusic.org/news/radioissuesstatement.cfm. Published by Via Sapientiae, 2016 3 DePaul Journal of Art, Technology & Intellectual Property Law, Vol. 12, Iss. 2 [2016], Art. 6 390 DEPA UL J ART. & ENT. LAW [Vol. XII:387 including the FCC's role in gradual radio deregulation, the enactment of the Communications Act of 1934 ("Communications Act") and its evolution up to the Telecom Act. The legislative history reveals that public policy goals of the Communications Act are neither expressly written within the Communications Act, nor are they goals currently practiced within the music industry. An emphasis on Clear Channel's history and evolution to become the most dominant media powerhouse illustrates both the positive and negative effects of the Telecom Act, but more importantly, how public policy considerations effectively vanished in the midst of massive consolidation. A. Evolution of FCCRegulation As a public asset, radio is a distinct medium that historically exists to serve the public interest.5 The 1927 Radio Act "provided structure and oversight to the public spectrum, [but] it failed to clearly define the "public interest," and generated serious debate."6 Although legislators required broadcasters to deliver diverse programming and information beneficial to the American public, the failure of clearly defining "public interest" ultimately left the FCC with full discretion in determining public policy goals.7 The 1934 Communications Act revised the 1927 Radio Act, yet still