20 years ago, the Telecommunications Act was signed by President Clinton. It didn't take long for that deregulation of the industry to make a handful of people rich...at the expense of the entire industry. It's now a shell of it's former self, and it all goes back to that horrible day. From Tom Taylor's NOW column today...
With one fateful policy decision 20 years ago, the FCC widened the door to consolidation. It was all about how you define a “radio market” – and the FCC did it with great generosity. Randy Michaels was running Jacor in 1996 and he was one of the first to grasp the implications of how the FCC interpreted the Telecommunications Act passed by Congress, signed by President Bill Clinton and supported by the NAB. Michaels understood that the way the FCC implemented the Act was an unexpected gift to consolidators like him. Congress passed the broad outlines of what the largest players in the radio industry wanted. But as they say, “The devil’s in the details,” and the FCC defined a radio market as including all the signals that overlapped the contour of any of home-market stations – even if they were dozens of miles away. That turned even relatively small markets into situations where a single owner could have seven or eight stations. Congress probably meant only the largest metros to be “eight-station markets” – but it didn’t work out that way. Many observers are commenting on the 20th anniversary of the February 1996 Telecom Act, and radio blogger Dick Taylor is one of those who decries the fate of the “Golden Goose” of parable-fame. Taylor says that as of 1996, “owners [were like] the farmer cutting open his goose to get all the eggs at once.”
I don't know much about other industries, but when I hear someone say that deregulation will solve any problems, I think of the only deregulation I truly understand. It was an abomination. Until someone can show me an example of how it can help an industry--I assume the opposite. The only other deregulation I've looked into--the deregulation of the banking industry--nearly destroyed the entire world's economy.
