Mergermania
The Effects of the 1996 Telecommunications Act


"Television is used mostly as a stroking distraction from the truth of an indifferent and silent universe and the harsh realities just out of sight and sound range of the box . . . People, like it or not, do not want to turn television off and that is why they are so deeply offended when they are turned off by it. And, of course, "Turn it off, if you're offended" is absolute heresy to those of us making television. Our mission is to enlarge the audience, not to shrink it."
-- former network producer Bob Shanks, from the book The Cool Fire

Television is big business. And thanks to the Telecommunications Act of 1996, the business is about to get bigger. As evident in the Corporate Television section of this site, the large media companies are gobbling up the smaller ones at an astounding rate. Mergers, takeovers and acquisitions are becoming the norm in the television industry.

The new law has stripped down the television ownership rules so much, that big media players will can be more aggressive in buying out smaller stations. "This bill unleashes a digital free-for-all," said Rep. Ed Markey (D-Mass.).

According to Advertising Age, spending on national TV advertising for the 1995-1996 programming season should reach $15 billion. With rates of nearly $1 million per commercial minute during NBC's Seinfeld and ABC's Home Improvement, the industry is not likely to shrink.

Global media giant Viacom Inc. remarked that the Telecom Act's "procompetitive and deregulatory nature is good for the telecommunications industry, since it will allow cable, broadcast and telephone companies to enter into new markets with greater certainty and less government constraints."

A new legislative fight is brewing on the horizon as the broadcast industry gears up for the introduction of digital television. Networks are trying to influence legislation which would block FCC efforts to force them to pay for use of the new broadcast spectrum.

An unlikely foe of the networks has turned out to be conservative Senator Bob Dole of Kansas. In an effort to bolster his campaign for President, Dole spoke harshly of efforts to obtain free broadcasting liscences. "Apparently the democratic process is not good enough for most broadcasters," he said. "TV broadcasters are now running ads and so-called public service announcements claiming that TV will die without this huge corporate welfare program."

The Telecommunications Act (sent to the President as S.652) sailed through Congress in February, 1996. The votes went 91-5 in the Senate and 414-16 in the House. Highlights include:

For further reading: