Consumer discontent with broadcast radio appears to have finally gotten the attention of politicians. Appearing before the Commerce Committee in January, Powell received an earful from senators who for years were indifferent to radio. Suddenly, they were pressing him about the industry's runaway consolidation. In a rare move, Powell, an articulate free-market advocate who thinks today's ownership rules don't "reflect the realities of the modern media marketplace," conceded he was "concerned about the concentration, particularly in radio."

"The Commerce Committee," says BIA Financial's O'Brien, "was sending a message to the FCC about media consolidation: We don't want this to happen again."

That point was amplified again in late January when Commerce Committee chairman Sen. John McCain, R-Ariz., held another media consolidation hearing, this one focusing almost exclusively on Clear Channel. At the hearing, the company's billionaire founder and CEO Lowry Mays came face to face with critics from the radio and record world.

Classic rocker Don Henley testified that artists are "shackled by the anti-competitive practices of the conglomerates." Sen. Russ Feingold, D-Wis., took the opportunity to reintroduce his legislation, the Competition in Radio and Concert Industries Act, a bill that takes direct aim at Clear Channel and radio consolidation. Rep. Howard Berman, D-Calif., cataloged a laundry list of allegations his office had received after he wrote the Department of Justice and the FCC urging them to investigate complaints about Clear Channel and its role in the radio and concert business. Joining the pile-on was Sen. Ernest "Fritz" Hollings, D-S.C., the committee's ranking Democrat, who complained, "Radio consolidation has contributed to a 34 percent decline in the number of owners, a 90 percent rise in the cost of advertising rates, [and] a rise in indecent broadcasts. If ever there were a cautionary tale, this is it."

For his part, Clear Channels' Mays, who purchased his first AM radio station in 1972, insisted "the industry is healthier and more robust than ever before," and argued that Clear Channel has simply done what the Telecom Act was supposed to allow broadcasters to do: expand. (Clear Channel today owns approximately 970 more stations than its closest competitor.) As for the allegation that Clear Channel squeezes artists by threatening to curtail radio airplay if acts don't tour with Clear Channel's concert division, Mays insisted the company "does not use the threat of reduced airplay to force musicians to tour with us or retaliate." Clear Channel is currently being sued over that very allegation.

While Feingold's legislation is no closer to being passed this year than it was last, and nobody is suggesting that Congress or the FCC will go so far as to re-regulate radio, the hearing did get the attention of the Justice Department, which for months has been sitting on requests to look into anti-competitive allegations about Clear Channel. Just hours after the hearings concluded, the DOJ contacted, for the first time, radio industry players who had indicated they'd be willing to cooperate with a Clear Channel probe.

It's too soon to tell whether the DOJ will launch such an investigation, but the fact that the DOJ is even making inquiries is a sign of just how much Clear Channel's radio exploits have become a political issue. Clear Channel has been forced to devote an increasing amount of money and time in efforts to fix its battered image, particularly inside the Beltway.

Last year the company opened a Washington office and hired Andrew Levin as its top lobbyist. Levin formerly served as counsel to Rep. John D. Dingell, Democrat of Michigan, the ranking minority member of the House Commerce Committee. (Salon was unable to contact Levin by press time.) And in early February Clear Channel announced that former Oklahoma Rep. J.C. Watts was joining the company's board of directors.

All that Beltway firepower may come in handy; there is congressional speculation that the Senate Judiciary Committee may soon schedule a hearing to investigate the controversial issue of pay-for-play. That's where record companies pay middlemen, or "indies," millions of dollars in order to get songs on the radio. Major radio players such as Clear Channel profit handsomely from the system, but artists insist it is pure extortion.

None of those headlines are good news for media conglomerates busy pressing their case for deregulation. Indeed, News Corp. chairman Rupert Murdoch quietly made the rounds on the eighth floor of the FCC in early February pressing his case with commissioners. No doubt, Murdoch and all the other major players would have preferred to make their case without the topic of deregulation itself becoming a political hot button.

But Clear Channel, a proven magnet for criticism, has given foes of deregulation ample ammunition, to the dismay of those who want ownership caps in other industries lifted. "It doesn't help to have this brouhaha," says one senior executive with a major television company. "We like consolidation, but Clear Channel gives it a bad name."

Clear Channel itself stands to lose if the rush toward deregulation is slowed by the company's own actions. If Powell's FCC succeeds in dramatically relaxing ownership limits for media, there's a chance Clear Channel could, once again, be one of the major beneficiaries. The company already owns 36 television stations and might be a prime suspect for going on a TV buying spree in an attempt to further lock up media markets.

"Absolutely that's a possibility," says O'Brien. "If they have money to invest and the government lets them, they'll certainly look at that and do deals to advance their interests."

The results, says the owner of one Southeastern advertising agency, would, "be a disaster for small business, or anybody smaller than Clear Channel." The executive, who requested anonymity, says local Clear Channel radio-sales reps, wielding leverage drawn from an unprecedented stable of stations in his market, routinely bully agencies and clients.

"Clear Channel will do anything they can, threaten me, go to my clients directly, anything to get control of the markets. And once they've got that control they can do whatever they want, including raise the rates," he says. "They're a clear example of what can happen with deregulation. They've ruined radio, as far as I'm concerned. And now they're licking their chops to be able to control more of what the public sees and hears."

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