During the days when radio was developing, there were only a few in control of the airwaves. Throughout history, only a few remained in control thus creating a monopoly which was fostered by the United States government. Early radio broadcasts include Samuel Morse’s first telegraphic line in 1844, Guglielmo Marconi’s experiments on wireless telegraphy, and Lee DeForest’s wireless telephony in1899. All of the aforementioned helped create a type of communication, point to point, which at the time was revolutionary. Point to point communication was useful in ships being able to communicate with those on land.
Point to point radio transmissions were eventually replaced by broadcasts of voices and music. A growing medium which at one point allowed radio amateurs to cram the airwavessaw the need for government overseeing and regulation. One of the first signs of the government’s fostering of monopoly is notated in the textbook Media & Culture. “When the United States entered the war in 1917, the navy closed down all amateur radio operations and took control of key radio transmitter to ensure military security. (Campbell, Martin, & Fabos, 2007)” The U. S. wanted to at first create a governmentalsector monopoly on radio.
Because this idea was opposed, the government then allowed General Electric (GE) to create a public sector monopoly on radio. GE was allowed to found new companies such as RCA, acquire holdings in a competitorcompany, and acquire radio patents of other U. S. companies. This was allowed because …”it gave the United States almost total control over the emerging mass medium of broadcasting… (Campbell, Martin, & Fabos, Media & Culture an introduction to mass communications, 2007)” “…RCA ensured the global dominance of the Untied States in mass communications. Campbell, Martin, & Fabos, Media & Culture an introduction to mass communications, 2007) ” The U. S. Department of Commerce allowed official licenses for five commercial radio stationsto operate in 1921. More than six hundred commercial and non commercial stationsexisted by 1923. These stations were operated by amateurs, independently by businessesand universities, and some were owned by GE, Westinghouse, and AT&T. AT&T ventured into the radio broadcasting business after complaining of RCA’s allowedmonopoly in the market.
AT created a network of different stations which in turn was met with competition by a network of stations put together by RCA, GE & Westinghouse. RCA eventually won the battle with AT and was quickly back to monopolizingthe market but in the late 1920’s that was once again coming to an end. The government, which once was helpful in assisting RCA in creating a market monopoly was now scrutinizing the company’s hold on the market and creating some ownershiprestrictions. Under pressure, RCA eliminated some of its holdings which allowedGE, Westinghouse and others to compete.
Most ownership restrictions were eliminated by the FCC (Federal Communications Commission) with the passage of the Telecommunications Act of 1996. “Since 1996, the number of radio station owners declined by 34 percent. (Campbell, Martin, & Fabos, Media & Culture an introduction to mass comunications, 2007)” Because of the passage of the 1996 Telecommunication Act, individuals and companies were allowed toown as many stations as they wanted. This continued the trend of monopoly in the market.
By 2000, two of the largest owners of radio stations throughout the United States are Clear Channel Communications and Viacom’s Infinity Broadcasting with 1,189 and 183 stations respectively. Clear Channel Communications has grown so largeby acquiring other large communications groups which owned radio stations. The success of Clear Channel Communications and its dominance in the radio medium are good evidence to support the thought that the government is allowing themto monopolize the market. This type of business, although it is dominating can have a positive impact on the industry.
The owners are definitely winners in these situations. For example, in 2005, Clear Channel Communication’s revenue was listed at $3,754 million (Campbell, Martin, & Fabos, Media & Culture an introduction to mass communication, 2007). For the listeners though, there is much variety in listening choices. Clear Channel Communications for example offers syndicated programs ranging from Dr. Laura (advice), Rush Limbaugh (political commentary, The Jim Rome Show (sports talk), andCarson Daly Most Requested (music). The variety of programming makes Clear Channel Communications market monopoly bearable.
It would be a different story if they only offered one point of view or one type of programming over all of their stations. Program sponsors are also big winners in this type of situation. They have the opportunity to go directly to Clear Channel Communications to buy advertising timeinstead of having to go directly to 1,189 stations throughout the country. This saves them time and money. Broadcast owners in the early days of radio were at an advantage by having the governmenton their side in support of holding a monopoly on the market. As times changedso did the government’s stand on monopolies.
Early day owners saw their hold on the market get taken away in the government’s support of opening up the marketto more company and individual owners. Modern day radio stations are mainlydominated by a few large companies. These companies are at an advantage in thegovernment’s allowance of them monopolizing the market. They are able to control the majority of the programming that is listened to daily throughout the country. These practices will continue unless once again, the government interferes to foster some other sort of market situation. REFERENCES
