Government-fostered ownership models and mechanisms

Government-Fostered Ownership

The media in the United States have always been subject to Government regulation. This is also true of radio since its inception during the World Wars. At the heart of such regulation is probably primarily the drive towards U.S. dominance and security during the World Wars. The changing economic and political climate has however perpetuated this paradigm throughout the media, and also for radio.

According to Eli M. Noam, the initial reasons for Government regulations on the radio broadcast industry was to limit the market power of the players involved. The companies controlling the industry were few, and Government officials felt that their power should be limited. Limits were therefore placed upon ownership and rates. Once these limits were lifted in order to allow for multi-channel broadcast, oligopolies began to arise, with existing companies increasing in size via mergers, acquisitions or growth, making it even more difficult for smaller companies to enter the market.

According to Noam, regulatory ownership limits on radio stations were increasingly lifted from the 1940s onward. Initially only allowing ownership of 7 AM and 7 FM stations during the 1940s, 12 AM and 12 FM stations were allowed in 1985, 18 of both in 1992, and 20 in 1994. Nationwide ownership limits were entirely eliminated by the year 1996. According to the author, the likelihood of this trend is, as mentioned above, not more owners, but a growth in already existing companies, and hence greater concentration.

Competition in the public radio network sector was however stimulated by a government funding policy change during 1985 (Noam).

Competitive public radio networks emerged as a result of this, of which an example is American Public Radio (APR). This competition has become extremely effective, according to the author, with APR surpassing the existing PR in hours and affiliated stations by 1993.

The paradigms of the government-fostered paradigms of the oligopoly and the monopoly have both advantages and disadvantages. For the government and the companies involved, the resultant lack of competition is easily controlled in terms of what is broadcast. The government can then more easily dictate what the public is to receive via the airwaves. For the companies involved, increased growth means increased revenue and success.

For the public, the most obvious disadvantage of the lack of competition means a probably lack of objectivity in broadcasting. This has implications for the ideals of freedom of the press and the public right for accurate information. On the other hand, an advantage is an increase of choice in terms of products offered by the large broadcast networks. Some for example have begun to offer Internet broadcasting stations, providing users with a wider variety of listening choices.