The Political Economy Of Radio

Robert W. McChesney

By political economy I refer specifically to how radio broadcasting is owned, controlled and subsidized. Another key component of political economic analysis is to look at how radio broadcasting relates to the social and class structure of society. Although I do not do much of that in this article, such a critique is implicit in the following. And while I concentrate upon radio broadcasting, at times it will be impossible to distinguish radio from television and other sorts of electronic communication. In the long run the same basic issues exist for all communication media.

Historically the rise of crucial new communication technologies like broadcasting has generated national public debates over how best to deploy these resources. This was because spectrum scarcity meant only a handful of broadcasters could operate at any given time in a region, and because the spectrum was seen as a publicly owned resource, it was as a result of such debates, for example, that public systems of broadcasting were established, to serve publicly determined goals, not to generate profit. These debates often took place among society's elites, but there has been periodic popular intervention. The extent to which there is non-elite participation into communication policymaking may be a barometer for the level of democracy in a society.

As a rule of thumb, if certain forces thoroughly dominate a society's political economy they will thoroughly dominate its communication system, and the fundamental questions of how the communication system should be organized and for what purposes are not even subject to debate.

Free Radio - Basic Micro Power Config 08

When radio broadcasting emerged in the 1920s few thought it had any commercial potential. Many of broadcasting's pioneers were nonprofit organizations - Interested in public service. It was only in the late 1920s that capitalists began to sense that through network operation and commercial advertising, radio broadcasting could generate substantial profits.

Through their immense power in Washington, these commercial broadcasters were able to dominate the FCC (Federal Radio Commission). As a result, the scarce numbers of air channels were effectively turned over to them with no public and little congressional deliberation on the matter. It was in the aftermath of this commercialization of the airwaves that elements of U.S. society coalesced into a broadcast reform movement that attempted to establish a dominant role for the nonprofit and noncommercial sector in U.S. broadcasting. These opponents of commercialism came from education, religion, labor, civic organizations, women's groups, journalism, farmers' groups, civil libertarians, and intellectuals.

The reformers attempted to tap into the intense public dislike for radio commercialism in the years before 1934, when Congress annually considered legislation for the permanent regulation of radio broadcasting. These reformers were explicitly radical; they argued that if private interests controlled the medium and their goal was profit, no amount of regulation or self-regulation could overcome the bias built into the system. Commercial broadcasting, the reformers argued, would downplay controversial, pro-working class and provocative public affairs programming and emphasize whatever fare would sell the most products for advertisers.

The reform movement disintegrated after the passage of the Communications Act of 1934, which established the FCC. The 1930s reformers did not lose to the commercial interests, however, on a level playing field. The radio lobby dominated because it was able to keep most Americans ignorant or confused about the communication policy matters then under discussion in Congress through their control of key elements of the news media and their sophisticated public relations aimed at the remainder of the press and the public. (Doesn’t all this sound somewhat familiar to South Africans? 1949 /1994? Think about it. Ed)

In addition, commercial broadcasters became a force that few politicians wished to antagonize; almost all of the congressional leaders of broadcast reform in 1931-1932 were defeated in their re-election attempts, a fate not lost on those who entered the next Congress. With the defeat of the reformers, the industry's claim that commercial broadcasting was inherently democratic and American went unchallenged and became internalized in the political culture.

Thereafter the only legitimate manner to criticize U.S. broadcasting was to assert that it was uncompetitive or "excessively" commercial, and therefore needed moderate regulation to protect the public interest while not damaging the commercial viability of the industry.

The basis for this "liberal" claim for regulation, was that the scarce number of channels necessitated regulation, not that the capitalist basis of the industry was fundamentally flawed. This was a far cry from the criticism of the broadcast reformers in the 1930s, which argued that the problem was not simply one of lack of competition in the marketplace, as much as it was the rule of the marketplace per se. It also means that with the vast expansion in the number of channels in the current communication revolution, the scarcity argument has lost its power and liberals are at a loss to withstand the deregulatory juggernaut.

This constricted range of policy debate was the context for the development of subsequent communication technologies including facsimile, FM radio, and television in the 1940s. Even public-service-minded New Dealers did not dispute that the communication corporations had first claim to these technologies. In comparison to the public debate over radio in the 1930s, there was almost no public debate concerning alternative ways to develop these technologies.

By the 1940s and thereafter, liberals knew the commercial basis of the system was inviolate, and they merely tried to carve out a nonprofit sector on the margins. (This was problematical, since whenever these nonprofit niches were seen as blocking profitable expansion, their future was on thin ice.)

By the middle 1930s the U.S. system of commercial broadcasting was thoroughly dominated by two enormous national networks - CBS and NBC - and supported by advertising. Both NBC and CBS argued that they could be trusted with such a prominent role in the U.S. broadcasting system because they would voluntarily act as public service institutions, even if it might detract from their profitability. In addition, the FCC technically reviewed license holders every few years to see that they were serving the "public interest, convenience, and necessity," although they almost never, ever withdrew any broadcaster's license.

When television came along in the 1940s, the FCC effectively turned it over to the same networks that dominated radio. It is clear that the commercial system has been very efficient at providing certain kinds of entertainment and satisfying certain kinds of audiences. At the same time, it has also been clear that a purely profit-driven and advertising-supported system ignores many areas that may be of public interest.

Almost from the beginning commercial broadcasting has generated criticism that it ignored or downplayed controversial political programming, or entertainment and cultural programming that would not attract huge audiences.

In addition, advertisers served as powerful censors of broadcast content, and it was not in their interest to sponsor programming that might undermine their sales messages. Much criticism also centered on the fact that the educational potential of broadcasting was scarcely being tapped by commercial radio and television, especially, though not exclusively, for children.

Indeed, by the 1960s it was nearly universally acknowledged that, despite its incredible success and popularity, the commercial broadcasting system had severe defects that were inherent to its nature.

The marginalization of public service values in U.S. communication debates - indeed the elimination of political debates over communication - explains the woeful history of U.S. public radio and television.

The defeat of the broadcast reform movement in 1934 led to what might be called the Dark Ages of U.S. public broadcasting. If the 1930s reformers sought a system where the dominant sector was nonprofit and noncommercial, all future advocates of public broadcasting had to accept that the system was established primarily to benefit the commercial broadcasters, and any public stations would have to find a niche on the margins, where they would not threaten the existing or potential profitability of the commercial interests.

This made public broadcasting in the U.S. fundamentally different from Britain or Canada, or nearly any other nation with a comparable political economy. Whereas the BBC and the CBC regarded their mandate as providing a service to the entire nation, the U.S. public broad casters realized that they could only survive politically by not taking listeners or viewers away from the commercial broadcasters. The function of the public or educational broadcasters, then, was to provide such programming as was unprofitable for the commercial broadcasters to produce. At the same time, however, politicians and government officials hostile to public broadcasting also insisted that public broadcasting remain within the same ideological confines as the commercial system. This encouraged U.S. public broadcasting after 1935 to emphasize elite cultural programming at the expense of generating a large following. In short, since 1935 public broadcasting in the United States has been in a no-win situation.

(Ed’s note – although our economies may be incomparable, South Africa has taken on the American commercial broadcast model; inherited as it was from the apartheid regime & pre-1990 corporations. His Master’s Voice & the technique of satisfying producers through advertising has not changed.)

The major function of nonprofit broadcasting in the United States from 1920 to 1960 was, in fact, to pioneer new sections of the electromagnetic spectrum when the commercial interests did not yet view them as profitable. Thus it was educational broadcasters who played an enormous role in developing AM broadcasting in the 1920s, and then FM radio and even UHF television in the 1940s and 1950s. In each case, once it became clear that money could be made, the educators were displaced and capitalists seized the reins.

Arguably, too, this looks like the fate of the Internet, which has been pioneered as a public service by the non-profit sector with government subsidies until capital decided to take over and relegate the pioneers to the margins.

The 1930s broadcast reformers were well aware of this tendency and refused to let the FCC push them into new technologies where there would be no access to the general public. After 1935, the proponents of public broadcasting had no choice in the matter. (In many cases, such as the Internet, satellites and digital communication, these technologies were developed through research funds provided by the federal government. Once the technologies proved profitable, however, they were turned over to private interests with negligible compensation.

Even with these limitations, the commercial broadcasters were wary of public broadcasting and fought it tooth and nail well into the 1960s. After many halting starts, Congress passed the Public Broadcasting Act of 1967, which led to the creation of the Corporation for Public Broadcasting (CPB), and soon thereafter of PBS (Public Broadcasting System) and NPR (National Public Radio).

The commercial broadcasters finally agreed not to oppose public broadcasting, primarily because they believed the new public system could be responsible for doing the unprofitable cultural and public affairs programming that critics were constantly lambasting them for neglecting. There was a catch, however.

The initial plan to have the CPB funded by a sales tax on the purchase of new radio sets and television sets, somewhat akin to the BBC method, was dropped, thus preventing public broadcasting a stable source of income necessary for planning as well as editorial autonomy.

At the outset it was determined that Americans would have a public system, but it would be severely handicapped. We would have only a system the commercial broadcasters would permit. Although U.S. public broadcasting has produced some good fare, the system has been supremely compromised by its structural basis, and it is farcical in comparison to the powerful public service systems of Europe. Indeed, in international discussions of public broadcasting, the term "PBS-style system" is invoked to refer to a public system that is marginal and ineffective. It is the fate that the BBC, CBC and others wish to avoid.

Moreover, public radio and television stations in the major markets have become decidedly conservative institutions (in the generic, not political, sense of the term). The Carnegie Commission - whose 1967 report was instrumental in the formation of U.S. public broadcasting - envisioned local elected community boards actively participating in the management and programming of the public stations. This notion has slid into oblivion and rather cumbersome bureaucracies have settled in. Often, especially in the largest markets, the leading figures on the public television boards are drawn from the very wealthiest and most powerful people in the community.

Public broadcasting, despite these drawbacks, has produced and continues to produce outstanding programming. In my home town of Madison, Wisconsin, it is a precious resource with a much broader audience than found elsewhere. Even those who are critical of public broadcasting acknowledge that it has an important niche in the market. The problem is that it is just that, a niche, and a niche serving only a sliver of the community written by the lobbyists for the communication firms it affects.

The only "debate" was whether broadcasters, long-distance companies, local telephone providers, or cable companies would get the inside track in the deregulatory race. Consistent with the pattern set in the middle 1930s, the primacy of corporate control and the profit motive was a given. The range of legitimate debate extended from those like Newt Gingrich, who argue profits are synonymous with public service, to those like Vice-President AJ Gore, who argue there are public interest concerns the marketplace cannot resolve, but can only be addressed once the profitability of the dominant corporate sector has been assured. The historical record with communication regulation indicates that although the Gore position can be gussied up, once the needs of corporations are given primacy, the public interest will invariably be pushed to the margins.

This situation exists for many of the same reasons the broadcast reformers were demolished in the 1930s. Politicians may favor one sector over another in the battle to cash in on the highway, but they cannot oppose the cashing-in process, without risking their political careers. Both the Democratic and Republican parties have strong ties to the large communication firms and industries, and the communication lobbies are among the most feared, respected and well endowed of all that seek favors on Capitol Hill. (In the RSA, ICASA, MOSHITO, RISA take note. Ed)

The only grounds for political independence in this case would be if there were an informed and mobilized citizenry ready to do battle for alternative policies. But where would citizens get informed? Only through the news media, where news coverage is minimal and restricted to the range of legitimate debate, which, in this case, means almost no debate at all. That is why the telecommunications Act was covered (rather extensively) as a business story, not a public policy story.

"I have never seen anything like the Telecommunications Bill," one career lobbyist observed. 'The silence of public debate is deafening. A bill with such astonishing impact on all of us is not even being discussed."

(ED’S NOTE: Remember 3rd Ear Music’s objections to the ICASA white paper? Where we weren’t ignored – especially in the so-called local content debate – we were denigrated. In effect, silenced. ICASA steams ahead in the dark.)

The debate over communications policy is restricted to elites and those with serious financial stakes in the outcome. It does not reflect well on the caliber of U.S. participatory democracy, but it is capitalist democracy at its best.

The politicians of both parties promised the public that the Telecommunications Act would provide a spurt in high-paying jobs and intense market competition in communications, a "digital free-for-all" as one liberal Democrat put it.

An even cursory reading of the business press at the same time would reveal that those who benefited from the law knew these claims to be half-truths or outright lies. These are oligopolistic industries that strongly discourage all but the most judiciously planned competition. It is more likely that deregulation will lead to merger activity, increased concentration, and continued "downsizing."

And, as the U.S. 1996 Telecommunications Act "unleashes" the U.S.-based transnational media and communication firms to grow through mergers and acquisitions with minimal fear of regulatory intervention, this effectively gives the green light to further consolidation of the global market these firms dominate. As such, the U.S. Telecommunications Act is to some extent a global law.

The most immediate consequence of the passage of the Telecommunications Act of 1996 has been the immediate and rapid consolidation in corporate concentrated ownership of U.S. radio stations. This is unconscionable and appalling. Corporations dominate nearly every nook and cranny of our media culture. Why not reserve all or most of the radio spectrum for nonprofit and noncommercial utilization?