U.S. Senator Russ Feingold At the Future of Music Coalition Policy Summit January 7, 2003 Thank you for the opportunity to speak here today about concentration of ownership in the radio and concert industry, and its effect on diversity and localism on our airwaves. I love radio. But let's understand something up front. I am not an expert. But, over the last year, I have learned what most of you know firsthand, that concentration of ownership in the radio and concert industry has made it difficult for individuals, artists, and organizations to find outlets to express their creativity and promote diversity. We have all come here with different sets of experiences, but what brings us together is our shared commitment to this simple principle: Radio is a public medium, and we must ensure that it serves the public good. I am here today because I started hearing about concentration in the industry a little over a year ago, first a comment from a friend, then a local concert promoter, and then a local station owner. I became struck by not just the number of people who approached me about it, but by how people from all different parts of the industry were saying the same thing – that anti-competitive practices were hurting radio as a public medium. Owners of a local concert promotion company told me about anti-competitive business practices by a large radio station and promotion company – the Clear Channel Corporation – that were pushing them out of business. Then I heard from a local radio station owner who said that a large radio station corporation had pulled some of their syndicated programming. The local radio station had spent years, and a lot of money, building a listening audience. And without notice, this large corporation pulled the show and gave it to one of their own recently-acquired stations. At social functions, friends would come up to me in casual conversation and talk about rising concert ticket prices. Let's get real here, when teenagers start coming up to me and talking about the rising cost of Phish tickets something is really wrong. I also want to clear up that I knew that the band is pronounced fish and not P-hish. I do have four kids out of high school and know about some of these things. What I realized is that the consolidation efforts of a number of companies were off the charts, and a groundswell of anger about their business practices was building in Wisconsin and across the country. The diverse interests of people who contacted me led me to think about other questions: What happened to entertainment? Where are the diversity of voices? What happened to localism on the radio? As a legislator, my first step to answering these questions was to ask the Department of Justice and the Federal Communications Commission to look into anti-competitive activities and allegations that certain companies were trying to evade the already minimal local ownership limits. I waited for months. I heard nothing from the Administration. Nothing from the FCC. Nothing from the Department of Justice. But while my letter fell on deaf ears with these federal agencies, I was amazed at the response I got from the public after I spoke to a reporter from the Chicago Tribune about these issues. In the interview I expressed my concerns, and I also mentioned that I was looking at possible legislation. I couldn't believe the response to the Tribune's article. Songwriters, artists, promoters, managers, consumer groups, religious organizations, unions, and radio station owners all contacted me asking, "what can I do to support your efforts?" In contrast to many of my past efforts, like my work to reform our campaign finance system, a number of powerful interests also came in to voice their support. Even the recording companies – which don't always look out for the little guy – have joined in support of my legislation. I hope that this broad support can help to move the bill forward. This legislation – and more broadly this issue – are not just about entertainment. I am here not just because we must preserve radio as entertainment, but because we must preserve it as a medium for democracy. While listening to a Bob Dylan CD on a recent family vacation, I couldn't help but remember the importance of music in the 60's anti-war and civil rights movement. Songs such as The Times, They Are A-Changin', helped speak for a generation. If only a few companies had controlled the airwaves and decided not to play these songs, this engine of change – music – that helped drive a movement could have been shut off. Those songs are a testament to the power of music, and to think that other songs like them today could be cut off from the airwaves is a testament to the dangers of radio concentration. Music carried over the radio can help society to consider some of the most serious issues affecting our nation, issues like war and peace, issues like social justice. If the already diminishing number of gate keepers of radio content chooses not to air controversial music because it may turn off advertisers, one of the most universal mediums to engage in a dialogue will be lost. Regardless of our point of view, we must retain the ability of radio to show the diverse range of voices that form our culture. My conversations with people about concentration in the industry just underscore the ways that we use radio to connect us to each other in our local communities, to connect to our culture, and to connect to our nation's political life. When I met with Russell Simmons a few months ago, he spoke passionately about the need to address local issues such as education funding and protecting freedom of speech. He helped me understand that without localism in radio, it will be difficult to promote local issues because some out of state owner may not choose to cover them if they are remotely controversial. He also underscored the importance of access to the airwaves to help local artists to get their message out. Whether it be hip hop or country, music helps build awareness of other cultures and views. He told me that people might not like the reality that there is poverty or violence in our culture, but music helps bring these issues to light. Music is one of very few media through which virtually every American can learn about our entire culture. If only a few companies control the airwaves, they can decide not to play any controversial music because their sponsors might not approve. But if this controversial music tells the story of what is going on in our communities, we must have the opportunity to listen. Engaging on this issue has taught me a great deal, including a lot about different areas of the music industry. But I've found that in some cases my younger staff has very low expectations for my knowledge of popular culture. They think that a Senator can't help but be a little behind the times. My staff who helps me with telecommunications issues informed me that Russell Simmons also has a clothing line called Phat Farm. He then felt the need to clarify that Phat is pronounced with an F and means "cool" or "good," not that someone is overweight. I thanked him for this information, but said that I was aware of the pronunciation and meaning. I then told him that he now has to call me the "Def Senator" to show me the respect that I earned by knowing the meaning of the word Phat. I have also heard a great deal from religious organizations about how consolidation harms their ability to reach out in their communities. They have said that we must get to the root of the problem by curbing anti-competitive practices that make it difficult for locally-owned, independent radio stations to prosper. I also learned about the story of Everett Parker, who during the civil rights movement of the 1960s was a pioneering defender of public interest in broadcasting. In Dr. Parker's most famous crusade, he and the United Church of Christ went to Jackson, Mississippi, to challenge the license renewal of stations that were blocking coverage of the civil rights movement, despite the fact that African-Americans constituted almost 50 percent of the audience. By failing to cover the civil rights movement, the station failed all of the citizens of Jackson by limiting access to information on issues of public importance. So, joining with the local NAACP, the group went to the Federal Communications Commission and challenged the license of the Jackson stations. The case went all the way to the District of Columbia Circuit Court Commission, which took away the station's license. What makes this case so significant is that it established the right of any American to petition the Commission, instead of limiting such petitions to commercial interests. The last time I checked, radio airwaves continued to be owned by the public. We need to remind the FCC that radio is a public medium. It must serve the public good. Radio connects us to the democratic process. At the annual Congressional Black Caucus event last year, Eddie Edwards and Tony Gray, two people who have been involved in radio for decades, told me about the real life importance of diversity in radio. They spoke about the importance of the locally owned media that helped raise public awareness of the campaign of the late Harold Washington to become the first black mayor of Chicago. They said that the main avenue for many in the central city to hear about the campaign was through locally- owned radio stations. If an out-of-state corporation controlled the programming of these radio stations, would this political pioneer have received the same coverage? Artists and their managers have spoken with me and my staff about the challenges of getting songs on the airwaves. They voiced concerns about how the playlists are no longer based on quality, but are sold to the highest bidder. They told me how in the past, if you couldn't get a song played in Cleveland, you would try to find a DJ in Pittsburgh. If the song was a hit in Pittsburgh, the Cleveland DJ would hear about it. That can't happen anymore. The same companies own stations in both markets. If they don't want to play it on any of their stations, the opportunities simply don' t exist. And because of the new shakedown system – where large radio stations allegedly require huge payments through independent promoters to get on the air – if you don't have the money to play in the system, you are shut out. You've got to pay to play. Let's just listen to the words of Tom Petty's recent album The Last DJ. What's the result of radio consolidation? "...there goes your freedom of choice. There goes the last human voice. There goes the last DJ." I understand that this song is about a true story and of a DJ who was forced to go to Mexico to ensure that he could choose what to play on the airwaves. Well, I think we should bring this last DJ back and add more independent local voices like his to our airwaves here in the U.S. And then there is the issue that my kids and other young people are up in arms about: rising concert ticket prices. In fact, both consumers and artists have voiced their concerns about rising ticket prices and the disparity between what consumers are paying and what the artists actually receive. Throughout my time in the Senate, I have seen this same phenomenon take place when a part of an industry becomes concentrated. Those producing the product – the artists – and those buying the product – the consumer – both get squeezed by the big radio station owners and mega promoters holding all the power. I qualify my comments by saying the large promoters because local concert promoters are also feeling the pain. My staff has heard countless stories of the largest concert promoters using questionable business practices to push local concert promoters around. To even begin to roll back the power of these companies that are squeezing the life and vitality out of the radio and concert industry, we must address some of the negative consequences of the 1996 Telecommunications Act, which opened the floodgates for concentration in the radio and concert industry. Consider how the rise in ticket prices coincided with the passage of the Telecommunications Act. Following the passage of the Act, and the resulting consolidation of the radio and concert industry, ticket prices went through the roof! Before the passage of the 1996 Act, ticket prices were increasing at a rate slightly higher than the Consumer Price Index. Following the Telecommunications Act of 1996, however, ticket prices have increased at a rate of almost 50 percentage points higher than the Consumer Price Index. From 1996-2001, concert ticket prices rose by more than 61 percent, while the Consumer Price Index increased by just 13 percent. During the debate of the 1996 Act, I joined a number of my colleagues in opposing the deregulation of radio ownership rules because of concerns about its effect on consumers, artists, independent radio stations, and local communities. Passage of this Act was an unfortunate example of the influence of soft money in the political process. I have consistently said that this Act was bought and paid for by soft money – by unlimited contributions by corporations, unions and wealthy individuals to the political parties. Everyone was at the table, except for the consumers. In November, we began to finally rid the system of the soft money loophole, but we must repair its damage. While I opposed this act because of its anti-consumer and anti-localism bias, I could not predict that one particular provision would have caused so much harm to a diverse range of interests. The Act has triggered a wave of consolidation and caused harm to consumers, artists, concert goers, local radio station owners and promoters. When the 1996 Telecommunications Act became law there were approximately 5,100 owners of radio stations. Today, there are only about 3,800 owners, a reduction of about 25%. Many of the same corporations that own multiple radio stations in a given market also wield their power through their ownership of a number of businesses related to the music industry. For example, the Clear Channel Corporation owns over 1200 radio companies, more than 700,000 billboards, various promotion companies, and venues across the United States. Also, just three years ago, in 1999, Clear Channel bought SFX productions, the nation's largest promotion company. Because of these concerns, last year I introduced legislation, the Competition in the Radio and Concert Industries Act, which would reduce the levels of concentration and curb some of these anti-competitive practices. My legislation prohibits those who own radio stations and concert promotion services or venues from leveraging their cross-ownership to hinder competition in the industry. For example, if an owner of a radio station and a promotion service hinders access to the airwaves of a rival promoter or artist, then the owner would be subject to penalties. My legislation will also help to curb the concentration that leads to these anticompetitive practices. It would strengthen the FCC merger review process by requiring the FCC to scrutinize the mergers of any radio station ownership group that reaches more than 60% of the nation. My legislation will also curb consolidation on the local level by preventing any upward revision of the limitation on multiple ownership of radio stations in local markets. The bill would also prohibit the current shakedown system, where the big radio corporations leverage their market power to require payments from artists in exchange for playing their songs. And it will also close a loophole that allows large radio ownership companies to exceed the cap by 'warehousing stations' through a third party. In these cases, they control the station through a third party, but the stations are not counted against their local ownership cap. Songs and ideas should not be broadcast on the radio based on how much money has changed hands. Airplay should be based on good songs and good ideas – what the local audience wants to hear. My legislation will slow the levels of concentration and address a number of concerns that I have heard from artists and others, although it does not address all the barriers we face. Passing this legislation will not be easy. Last year, my legislation had two cosponsors, Senator Durbin of Illinois and Senator Miller of Georgia. But we have heard from more than a dozen other Senators who are interested in signing on. I will be re-introducing my legislation in the coming weeks and my hope is that we will have Congressional hearings early this year.We need your help. Some say that we need more Washington lobbyists to pass this bill. But I don't think so. We don't need more Washington lobbyists to advocate for my legislation. To pass this bill, people like you, who want to restore localism and diversity to our airwaves, must speak out for change. We must speak out to give our airwaves back to the public, and the only way that we can do that is if we work together to help channel the public's voice in Washington. So, let's work together to restore competition to the radio and concert industry by putting independent radio stations, local concert promoters, and artists on a level playing field. People should have choices, listeners should have a diversity of options, and Americans should be able to hear new and different voices. Radio allows us to connect to our communities, to our culture, and to our democracy. It is one of the most vibrant mediums we have for the exchange of ideas, and for artistic expression. We must fight to preserve it, and together I believe we can do just that. Radio is a public medium, and we must ensure that it serves the public good. That's a democratic vision of American radio well worth fighting for.

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