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CONTACT: Patrick Ross or Amy Smorodin
December 8, 2005
(202) 289-8928

Deregulation Would Level Local Radio Playing Field
Thierer Cites Regulatory Disparities, Media Convergence

WASHINGTON D.C. - Congress and the FCC should free "over the air" broadcast radio from regulations that are not imposed on its competitors to allow it to compete with satellite radio and other media, writes Adam Thierer in a new Progress on Point, "The Future of Radio Regulation: The Need for a Level Playing Field." In the paper, the author further warns of imposing new regulations on satellite radio, including restrictions on local content. The playing field is best leveled by "deregulating down," Thierer says, not regulating up.

Thierer, PFF Senior Fellow and the Director of the Center for Digital Media Freedom, examines the changing landscape of terrestrial radio. Since its inception, radio has enjoyed little direct competition because "radio had few direct substitutes." The rise of satellite radio, however, has threatened the viability of terrestrial radio. The ability of consumers to access audio content on multiple platforms that are not subject to content and ownership regulations also threatens radio. Thierer explains, "[W]hile other unregulated competitors continue to steal away market share and advertising dollars, terrestrial radio broadcasting remains one of America's most heavily regulated media sectors. Volumes of FCC regulations apply to them that do not apply to any of the other new competitors or technologies mentioned above."

The author identifies two arguments supplied by the broadcast industry as reasons for regulatory intervention by Congress and the FCC: Terrestrial radio's position as a "carrier of last resort" of local information, and regulatory disparity. These concerns are behind legislative efforts to restrict the ability of satellite radio to offer local content. Thierer, however, sees an opportunity for terrestrial radio to exploit its advantages in the local programming market. "It takes a significant investment in human infrastructure (reporters, producers, etc.) to provide a true local media presence. At this time, it is difficult to imagine satellite radio operators changing their business models and making this plunge into full-time local affairs coverage." In addressing regulatory disparity, Thierer warns that "[a]s the lines continue to blur between formerly distinct media sectors and media technologies continue to converge, it will become increasingly difficult for policymakers to enforce the old regulatory regime. If the same radio program can be heard over a broadcast station, via an Internet webcast or download, on an iPod or a cell phone, or on a multitude of other devices, exactly how long can the old sector-specific regulations stand?"

In addition, The Progress & Freedom Foundation is releasing a transcript of the October 3rd CEO Luncheon which featured Mark Mays, CEO of Clear Channel Communications. Mays addressed the role of localism in radio broadcasting, media ownership regulations in the radio industry, indecency regulations and public interest mandates that are apply specifically to broadcast media. The panel discussion, moderated by Thierer, addressed many of the same issues outlined in the Thierer's new Progress on Point.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation