I never would have believed it then, but the free-form radio I fell in love with was actually a byproduct of government regulation.
Creating Competition
Frequency-modulated (FM) broadcasting was developed in the 1930s, but amplitude-modulated (AM) broadcasting remained the dominant standard for over thirty more years. Though AM radio broadcasts suffered interference from everyday things like buildings, power lines, and hills, listener habits and the installed base of AM-only radios kept higher-quality FM from catching on.
Even as late as the 1960s, listeners had little reason to switch. FM was simply a high-quality echo of the AM band, as established radio stations used FM sister stations to simulcast their AM programming. Simulcasting was so predominant that by the mid-1960s, the FCC issued a directive limiting the practice. The new rule, which prevented station owners from simulcasting their AM programming on more than 50 percent of their FM stations, was designed to coerce sluggard broadcasters into making better use of the FM band. The FCC didn't particularly know what effect the rule would have, but it did understand that public interest was best served by diversity and competition.
When the FM-simulcast cap took effect, station owners weren't sure what to do. Some simply copied the formats from their AM stations, with new on-air personalities reshuffling the AM programming. Others used the FCC's directive as an opportunity to target new markets. AM was, after all, where the existing audience was. Why not allow the FM station to play around a bit? If the young DJs wanted to play songs no one had heard before, in formats they called "album rock" or "talk radio," who really cared? Maybe something would catch on. And of course, it did.
By the 1970s, everything interesting that was happening in radio was happening on the FM band. The FCC directive opened up new channels for communication that previously had been wasted in simulcasts. The new opportunities for programming fostered healthy experimentation and created new audiences of radio listeners.
Back to Boring
The FCC's simulcast directive was handed down in a different regulatory climate than today's. At one time, federal regulators believed that caps on media ownership were necessary both to prevent domination by special interests and to ensure that local views were heard and preserved.
In the early 1980s, an FCC rule prevented any single company from owning more than eight radio stations. In that decade, however, the government's thinking about the social benefits of media-ownership caps started to change. The cap edged up throughout the 1980s and 1990s, until it was eliminated by the 1996 Telecommunications Act.
It didn't take long for the market to consolidate. Just seven years after the act's passage, Clear Channel Communications, the dominant provider of U.S. radio, now owns over 1,200 stations, and four companies collectively reap over 90 percent of radio's advertising revenue.
I certainly haven't done a scientific study, but the results of consolidation are audible. Radio stations may not be as obviously identical as the 1960s simulcasts, but the music sounds largely the same across the dial, and the personalities lack any, well, personality.
That's why I'm excited about the promise of Internet radio, which has the potential to bring back the variety and experimentation that consolidation killed.
New Media Competition
Internet radio isn't really "radio" of course. "Radio" is the wireless transmission of electromagnetic waves in a certain frequency range. It's regulated by the FCC because of bandwidth scarcity and the need to ensure that broadcasters don't interfere with each other's frequencies in the geographic areas they serve. That's not what's happening on the Internet, and Internet broadcasters, or webcasters, don't face the same regulatory climate. But there is a relationship between the two, perhaps even a competitive one.
Back in 1996, one of the primary justifications for lifting the caps on radio ownership was that radio had to compete with new media: primarily cable, satellite, and the Internet. Even if a few companies came to dominate the radio bands, they couldn't dominate the listener experience. That was the theory, anyway. Consolidation in one medium was acceptable so long as variety from other mediums remained available.
When you first consider it, the idea that the Internet can provide an effective buffer against the consolidation of more conventional media seems just right. With unlimited source points for broadcasts, Internet broadcasters could consolidate as much as they wanted, and we'd still have limitless opportunities for new broadcasters to start businesses. If there has ever been a medium that truly could compete with radio, it is the Internet.
What no one counted on, however, was that the government and the recording industry would stifle the new medium of Internet radio through oppressive royalty rates.
