Telecommunications Act of 1996
The Telecommunications Act of 1996 was a significant legislative overhaul of the Communications Act of 1934, aimed at promoting competition and reducing regulatory barriers in the telecommunications industry. Despite its passage by a large majority in Congress, the act faced criticism for the lack of public debate and media coverage surrounding its implications. Proponents claimed it would lead to substantial consumer savings and job creation; however, the anticipated benefits largely failed to materialize. Instead, consumers experienced rising cable and phone rates, while the industry saw a substantial job loss.
One of the most controversial outcomes of the act was the consolidation of media ownership, which many critics argued threatened the diversity of information available to the public. The elimination of national ownership caps for radio stations facilitated rapid mergers, resulting in a few companies dominating the market. This consolidation led to significant cuts in local programming and news coverage, contradicting the act's promises to enhance media quality and diversity. Additionally, minority ownership in the media sector declined following the legislation, raising concerns about representation in media narratives. Overall, the Telecommunications Act of 1996 has had lasting implications for consumers and the media landscape.
On this Page
Subject Terms
Telecommunications Act of 1996
Identification U.S. federal legislation deregulating the telecommunications industry
Date Signed into law on February 8, 1996
With little attention from the press, Congress passed the Telecommunications Act of 1996, the stated goals of which were to produce more competition, a greater diversity of viewpoints, jobs for the economy, and lower prices for consumers.
The U.S. Congress passed the Telecommunications Act with a huge majority despite a threatened veto by President Bill Clinton. There was a notable lack of public debate about the legislation, which was a major overhaul of the Communications Act of 1934. Media scholar Robert McChesney lamented the poor press coverage and quoted one lobbyist as saying, “I have never seen anything like the Telecommunications Bill. The silence of public debate is deafening. A bill with such astonishing impact on all of us is not even being discussed.”
Telecommunications spokespersons said that the act would save consumers $550 billion and add 1.5 million jobs. The promised savings never materialized. Instead, cable and local phone rates rose, while the telecommunications industry lost a half-million jobs. Some critics, such as Kansas senator Bob Dole, called the act a giveaway to the media firms. Not only did the rates go up for the public but the consolidation of the media created a monopoly threatening the diversity of information as well.
Many public officials did not foresee the consolidation of the media and the devastating results that would take place. After the passage of the law, a wave of media mergers and buyouts occurred almost overnight. The Telecommunications Act of 1996 eliminated the national ownership cap on commercial radio stations, and Clear Channel began to buy up stations and reduce, if not altogether eliminate, local news and other local programming.
By 2002, the changes brought by deregulation had left ten companies controlling two-thirds of the radio audience, with two companies, Viacom and Infinity Broadcasting, controlling 42 percent of the listeners. Despite promises by the major media companies to increase news programming, news staffs shrank by 44 percent and part-time staff by 71 percent. The promise to improve on the lack of minority ownership actually caused a decrease by 14 percent.
Impact
The Telecommunications Act of 1996 resulted in the public paying more money for services and a decrease in minority ownership. The passage of this legislation by Congress created a media monopoly that has left the public stranded amid a sea of mergers and takeovers by media giants, which was not the stated goal of the act.
Bibliography
Aufderheide, Patricia. Communications Policy and Public Interest: The Telecommunications Act of 1996. New York: Guilford Press, 1999.
Cooper, Mark. Media Ownership and Democracy in the Digital Information Age. Stanford, Calif.: Center for Internet & Society, Stanford Law School, 2003.
Wexler, Celia. “Channeling Influence: The Broadcast Lobby and the $70 Billion Free Ride.” Common Cause, April, 1997, 20.