Date Issued: 
September 1, 2002

George Williams and Scott Roberts.  

Media Bureau Staff Research Paper 2002-11 (Sept 2002) examines the effect of the Telecommunications Act of 1996 on the radio industry.  That Act eliminated limits the FCC had previously placed on the number of radio stations a single entity could own nationally and relaxed limits the FCC had placed on ownership of radio stations in a local market. 

The authors find that, between March 1996 and March 2002, the number of commercial radio stations increased by 5.4 percent and the number of radio owners declined by 34 percent, primarily due to mergers between existing owners.  Over the same period, there was an increase in the size of the largest radio group owners.  In 1996, the two largest radio group owners consisted of fewer than 65 radio stations each.  By March 2002, the leading radio group (Clear Channel Communications) owned approximately 1,200 radio stations and the second largest group owner (Cumulus Broadcasting Inc.) had approximately 250 stations.

The authors also find that the largest two firms in each radio market have, on average, 74 percent of the market’s radio advertising revenue.  They conclude that, overall, the variety of radio formats available to consumers has held steady.  However, in recent years, the average number of formats appears to have declined slightly for some of the large markets while increasing slightly for most of the smaller ones.