WASHINGTON -- The buying frenzy that has put most major radio stations in the hands of a few huge corporations could spark a massive policy showdown between consumer groups and the radio industry.
At the Future of Music Coalition's annual policy summit held here this week, people representing musicians, record labels, consumers and others charged that radio deregulation since passage of the 1996 Telecommunications Act has destroyed diversity on the airwaves.
Amid grumbling that radio consolidation has led to a rash of bad music and rampant "payola" schemes that hurt independent artists, policy makers offered a sympathetic ear.
"If you don't have the money to play in the system, you are shut out," said Sen. Russ Feingold (D-Wis.) on the topic of radio payola. "You've got to pay to play."
Feingold said he will reintroduce legislation this year to ban "the current shakedown system" of payola, bar companies that own both radio stations and concert promoters from using their leverage to bully artists and record labels and strengthen the Federal Communication Commission's radio merger review process. It would also close loopholes allowing companies to exceed current ownership caps by controlling stations through third parties.
"Radio is a public medium, and we must ensure that it serves the public good," he said.
Feingold said Sen. John McCain (R-Ariz.) will likely support the bill and could hold hearings on the issue -- although a spokeswoman for the Senate Commerce Committee was less committal, saying McCain "is interested in the issue, and he's looking at it."
Meanwhile, the FCC is reviewing its media ownership rules. While FCC chairman Michael Powell has hinted that he favors further deregulation, commissioner Jonathan Adelstein said the agency may tread more cautiously in light of concerns raised by the Future of Music Coalition and others.
"At what point does consolidation come at the expense of local expression?" Adelstein asked.
Andrew Schwartzman, president and CEO of the Media Access Project, said he expects the FCC to loosen ownership rules, but that "it's not going to be as bad as it might have been" if so many groups weren't complaining.
The National Association of Broadcasters, meanwhile, which was invited to the policy summit but declined to send representatives, maintained that deregulation has led to more variety.
"We totally reject the claim that there has been less diversity in radio since the 1996 Telecom Act," said NAB spokesman Dennis Wharton.
The NAB has been especially critical of the FMC's recent study, which concluded that localism and diversity have suffered mightily because of radio consolidation. Wharton said the study contains "pretty major errors," and he argued that more radio formats in local markets exist now than before deregulation.
On the other hand, Adelstein pointed out that many stations with different formats play many of the exact same songs. "Format diversity may not tell the whole story," he said.
The NAB said it's a lot of noise-making for nothing: In a recent NAB-commissioned survey, 65 percent of consumers said they are satisfied with overall radio programming and only 13 percent of radio listeners believe that local stations rarely or never carry music they like.
"The reality is that radio is a business driven by popular music," Wharton said. "That has always been the case. That will always be the case."
Others noted that competing technologies such as webcasting, low-power radio, wireless systems based on the 802.11b standard and emerging satellite radio are all creating new choices for consumers.
"What I tell people is really put their faith in new technology," said Lee Abrams, chief programming officer at XM Satellite Radio. He suggested that detractors stop bashing commercial radio and let the industry dig its own grave.
"Who is going to do to FM what FM did to AM?" he asked, noting that satellite radio and Internet stations have an opportunity to win over listeners discouraged by consolidation of commercial stations.
