• by Ross Fadner , October 6, 2005

Federal restrictions on the number of radio stations one company can own in a given market need to be relaxed, Mark Mays, chief executive officer of Clear Channel Communications, said earlier this week--or free radio may not be able to compete with the threat of emerging Internet and satellite radio providers.

"Today, free radio faces more competitive threats than at any other time in our history," said Mays, speaking at a Progress and Freedom Foundation event on Monday, "and none of these threats are crippled by the at times suffocating regulations that stifle free radio."

Mays said current restrictions that allow radio operators to own no more than 8 stations per designated market area place broadcast radio operators at a competitive disadvantage to satellite radio providers like Sirius and XM, which currently offer up to 150 channels in a given DMA, and Internet radio providers, which Mays said will one day be able to provide an unlimited number of channels through enhanced wireless technology.

Mays said the government should allow radio station operators to own up to 10 stations in markets with 60 channels or more and up to 12 stations in markets like New York and Los Angeles, where the number of channels exceeds 75. Clear Channel is the largest radio station operator in the United States, operating over 1200 radio stations.

Clear Channel's wish for more freedom to consolidate comes after a 6.5 percent year-over-year decline in advertising revenues for the second quarter, and an announcement in mid-August that the company plans to spin off its entertainment and outdoor divisions.

"Free radio is not asking for much more room," Mays continued. "Free radio is asking for a level playing field, and creating a level playing field has always been the government's most important and noble role in business."

Panelists at the Freedom event agreed that the playing field for satellite, Internet, and broadcast providers is not level, but pointed out that the inequalities don't always favor satellite providers either.

Christopher Stern, a senior analyst for Medley Global Advisors and an event panelist, pointed out that satellite providers cannot currently provide local news and information--a key service offered by broadcasters which they license.

Blair Levin, managing director and telecom/media analyst for Legg Mason, also noted that subscription fees for satellite radio, far fewer advertisements, and a lack of decency regulations are other factors that keep the playing field from being level.