• by John Gaffney , January 6, 2003

He’s outnumbered on the Federal Communications Commission, but FCC director Jonathan Adelstein spoke out yesterday against media consolidation. His comments at The Future Of Music Coalition were soft pedaled, but the commission’s lone democrat made it clear that loosening media ownership rules could lead to a less diverse marketplace.

“Any changes that the FCC makes to its media ownership rules could massively and irreversibly change the media landscape. These changes will affect all of us as viewers and listeners,” Adelstein said. “The FCC must proceed very cautiously, because if we permit further media consolidation and it turns out to be a mistake, we will find it difficult, if not impossible, to put the toothpaste back in the tube.”

Adelstein was making his first comments on the issue since the New Year’s deadline to reply to FCC studies. He referred to one of those studies, which showed that group owners account for an increasing share of radio advertising revenues in local markets. For example, last year the largest firm in each radio market had, on average, 47% of the market’s total radio advertising revenue. The largest two firms in each radio market had, on average, 74% of the market’s radio advertising revenue.

He complemented The Future of Music Coalition its study on the effects of radio consolidation, which raises more urgent concerns about increasing local radio market concentration and the rise of ever larger national radio groups. It concludes that as a result of these trends, programming on local radio stations is increasingly done at the national level rather by the local stations.

“Now, I understand that some consolidation can be a good thing. In radio, as in other sectors, economies of scale can lead to services that would not otherwise be possible. But consolidation also carries risks, risks that go beyond traditional antitrust analysis. Unlike the Justice Department, the FCC is charged by law with ensuring that media mergers are in the public interest,” he said.

Adelstein titled his presentation “The Last DJ?”, which is also the title of Tom Petty’s new record that blasts the current music business and radio. “Years ago, as a new artist, you might have gotten your first airplay on your local station – in a town where the DJ heard you at a local club the night before and wanted everyone else to hear you, as well,” he said. “As national groups buy out more local stations, that town may no longer have a local DJ at all.”