Thursday March 27, 2008

Department of (Cosmic) Justice

Aside from the Invasion of Foreign Countries lobby and the Election Stealing lobby, the National Association of Broadcasters might be the most powerful lobbying group in Washington. The XM-Sirius merger passed Department of Justice muster earlier this week, although it took more than a year, and the deal still needs FCC approval. What I find incredible about the NAB’s opposition to the merger, however, is that this is the same group that spent the last half of the ’90s arguing that a radio monopoly was basically impossible.

When Clear Channel was rolling up markets like Memphis—where I was reporting on media consolidation—the NAB argued that there was nothing to fear. Radio represented such a small slice of ad revenue (about 10 percent, as I recall) that even if you rolled up all of it, you wouldn’t be able to set prices. The DOJ ended up deciding that it was okay for a company to control 40 percent of a single market’s radio revenue, with the result that most city’s radio stations fell into the hands of just three companies. Using the same logic, Clear Channel was also able to gobble up most of Memphis’ billboard faces and two of its TV stations as well. But that was okay, because—according to the NAB’s logic—you have to judge competition by looking, not at a single medium, but at the entire media landscape.

Now, however, terrestrial broadcasters are singing a different tune, objecting to a potential “satellite radio monolopy”— a non sequitur according to its own logic. It’s a classic case of corporations lobbying against regulations while they’re rolling up a market and then arguing for regulations once they’ve rolled it up and want to keep competitors out. So, ten years later, I have to admit that the NAB was right. There wasn’t anything to fear from the rampant consolidation of the 1990s since it led terrestrial radio to become so sluggish and lame that a new competitor was—per the perpetual dialectic of capitalism—bound to emerge. Now that’s what I call justice.

Posted by jim at 10:47 AM ||