Deregulation of the Radio Industry

Before the Telecommunications Act of 1996 was put into effect, there was no competition between the broadcasting services. The Telecommunications Act of 1996 opened up a competitive field for broadcasting companies. It removed the previous laws that restricted the amount of market a company could have. However, there was still a limit to how much a company could own, because the Federal Communications Commission (also known as the FCC) did not want one company to just monopolize the broadcast market. Instead, there was a group of three or four companies that created an oligopoly. These companies included American Broadcasting Companies, Citadel, Clear Channel Communications, and Cox just to name a few. The companies in the oligopoly created many problems for the smaller radio broadcasters. The bigger companies were able cater to a larger audience while the smaller more local companies catered to a smaller audience. After awhile, most of the smaller companies could not afford to compete with the larger companies and ended up going out of business. The bigger broadcasting companies had a number of different stations in their hold and were able to control more of the radio market. This led to less diversity in the radio industry.