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Telecom Act 21st Birthday

Happy (?) 21st Birthday to the Telecom Act of 1996

Today the Telecommunications Act of 1996 turns 21. As some have remarked, the law is now old enough to drink, even while others note that it’s driven many to drink in the last two decades.

It’s hard to overstate the effects of the Telecom Act on our contemporary media and communications environment. The act’s elimination of the nationwide radio ownership cap and raising of local ownership limits cleared the way for massive consolidation and the creation of the debt-ridden behemoths iHeartMedia (née Clear Channel) and Cumulus. Deregulation of cable ownership also led to consolidation in that industry, along with a rise in monthly fees.

One of the Act’s most tarnished legacies is the biannual ownership rules review that the FCC is supposed to undertake. Our friend Prof. Christopher Terry puts an even sharper point to it, calling it a “legacy of failure.” To understand why it’s a failure, read his first post, and his two follow-ups: “Could the FCC’s Legacy of Failure Trigger Even More Consolidation?” and “The FCC’s Legacy on Media Ownership: Now with More Failure!

Prof. Terry also outlined the Telecom Act’s impact on radio exactly one year ago on episode 33 of our podcast:

Now with many lawmakers and players in the telecom and media industries calling for a fresh update, and with a deregulation-happy administration in the White House, it begs the question if we’ll see even more consolidation across media, radio included. No doubt the denizens of the executive suites at iHeart, Cumulus, Entercom and CBS Radio are salivating at the prospect.

Although the FCC does have a bit of leeway in how it regulates ownership, as Prof. Terry points out, the agency’s hands are pretty well tied by the Third Circuit Court of Appeals right now. Though on his most recent appearance on the podcast he did point out that the Commissioners, led by new Chairman Ajit Pai, can issue all sorts of waivers that grant exceptions to existing rules.

But when it comes to a revision of the Telecom Act, that fight will be in Congress. Those concerned about how well the public interest will be represented in that battle should be reminded that the ’96 Act passed with enthusiastic support from both parties in Congress, and was easily signed into law by President Bill Clinton. Pressure on congresspeople of all stripes will be necessary.


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