In 1895 a 21-year-old Guglielmo Marconi sent signals across his father’s country estate without using any wires. Four years later he had figured out how to send these same signals across the English Channel. When the young Italian proved that wireless waves were not affected by the curvature of the earth (1901), humanity had a system to communicate in real time across oceans and continents.
That was the original use of radio: a two-way communication device, like Alexander Graham Bell’s telephone but sans the cables. Problem was, as the first amateur “hams” found out, the radio spectrum is limited and whenever there’s more than one broadcaster on a particular frequency the static will cancel out all messages. This happened on a catastrophic scale in 1912, when scrambled distress signals botched the rescue effort for a sinking Titanic.
So the first piece of broadcast legislation ever enacted was the US’s Radio Act of 1912, and its intention was to maximise radio’s potential to save lives (through frequency control). Right. Give it another fifteen years and big business is in the ring, complaining that any schmuck with a dial and a wooden box can get a licence. National radio networks like RCA and NBC join forces to form the National Association of Broadcasters, which then harasses the newly constituted Federal Radio Commission into regulating the airwaves with a little more circumspection. I mean, c’mon, how can you deliver a reliable and consistent audience to advertisers when the jokers in Hicksville are sitting on your frequency?
In the US at least, things haven’t changed much since then. The Federal Radio Commission became the Federal Communications Commission (FCC) in 1934, with constituting legislation based on the comforting assumption that, since the public owns the airwaves, competition and diversity in media is a necessity. But advertisers and big business had been doing all the “owning” long before current FCC chairman Michael Powell – son of Secretary of State Colin Powell, lackey of President Bush, and unabashed supporter of media gigantism – appeared on the scene.
As Edward Herman, Professor Emeritus of Finance at the Wharton School, wrote in The Global Media: The New Missionaries of Corporate Capitalism in 1997: “Any organised opposition to commercial broadcasting collapsed following the 1934 Act [which set up the FCC], and from that time onward it has been subject to no serious threat of structural change or effective regulation. Regulation by the FCC has been weak and rules limiting advertising and the transformation of programming away from public service steadily eroded in the face of broadcaster demands, until the final collapse of even nominal standards in the Reagan era.”
Unless you happen to be an unrepentant bean counter for a media multinational, it’s not difficult to work out why broadcast regulation standards shouldn’t be allowed to drop below the “nominal”. Simply put, total commercial control, advertiser-determined audiences and unrestricted consolidation leads to lowest common denominator content – the “500 channels and nothing on” syndrome. Goodbye diversity. Were the young and developing South African democracy – where radio has traditionally been the medium with the highest penetration – to take its cue from the FCC, the inevitable result would be further entrenchment of the dichotomy between voiceless majority and fat, rich, consumerist (and, given the apartheid history, mostly white) elite.
That said, this young and developing democracy has only recently had its airwaves liberalised from the apartheid state’s control, so commercial investment is essential if the private broadcast sector is to continue growing. The challenge for our own regulator the Independent Communications Authority of South Africa (Icasa), as chairperson Mandla Langa regularly reminds us, is to strike the balance between “consolidation and constellation”.
Michael Markovitz, advisor to the Icasa chairperson, has played a key role in negotiating that balance. A media activist in the late ’80s and early ’90s, Markovitz was involved in the Codesa talks and helped draft the 1993 IBA Act, which first reformed South Africa’s regulatory environment. Recently (2004), he was an advisor on the Icasa panel that recommended amendments to the broadcasting law and proposed the introduction of ten new commercial radio licences.
“Our recent position paper identified two major concerns in the country,” says Markovitz. “One, we need more consolidation in the industry. Two, we need a greater diversity of viewpoints. Our policy can be called ‘regulated consolidation’. In other words, we will allow consolidation within a regulated environment, as distinguished from a free-for-all. We understand the need for critical mass in commercial broadcasting, but the ownership of stations should still be capped. The constraint on one owner having two AM and two FM licences has reached its sell-by date. We’ve changed that to a 35% cap on control by one entity of the total number of commercial sound broadcasting licences. Our thinking is, if the law is amended as we propose – using the element of proportionality – parliament wouldn’t have to amend the Act every few years.”
The current IBA Act, as Markovitz explains, “took some stuff from Australia’s broadcasting laws, some stuff from Canada’s.” These two countries have been relatively successful in regulating for diverse and healthy broadcast sectors that actively serve their respective publics’ interests, so clearly neither Markovitz nor Icasa are big fans of the FCC’s say-one-thing-do-another hoodwink. And the satisfaction Markovitz expresses at the ground Icasa has covered in the last decade seems legitimate.
“If I could blow our own trumpet, I think we’ve been successful. We’ve been lucky with radio in that the privatised old SABC stations are now doing very well. But of course we have had to favour historically disadvantaged groups. Ten years on, there is not one major radio group or station that doesn’t have significant black economic empowerment interests. The radio sector has moved a lot further than other sectors in South Africa.”
On that score there’s no arguing, but looking ahead to the next ten years Icasa will need to be incredibly creative if it’s to maintain its programme for servicing a diverse South African public. The three-tier regulatory system, which oversees licensing for public, commercial and community broadcasters, has had to field sustained attacks on two sides – and going forward there’s every likelihood that things will get hotter.
On the one hand there’s the public broadcaster, with three commercial radio licences (5fm, Metro and Good Hope FM) and 14 public service broadcasting (PSB) licences that together command almost 70% of the country’s total radio listenership. The cross-selling potential on these brands gives the SABC a huge advantage in negotiating rates with advertisers – and the private broadcasters simply can’t compete.
“The public broadcaster is very big and they do rely on commercial revenue,” Markovitz concedes. “The private sector has raised concerns, but the SABC argue that their funding model is legislated, and that the debate is closed from their point of view. But Icasa will investigate how these revenues are allocated. We’re in the middle of a process so we have not formed a view yet on all the different positions. Some interested parties have argued that we need to ‘ring fence’ public funds to ensure that there isn’t unfair cross-subsidisation of commercial operations.”
Whether that can happen to the satisfaction of the smaller broadcasters is questionable, because there’s also the international context to consider, where public service broadcasting is battling to maintain its raison d’etre. As Professor Fourie of Unisa recently stated during a Media Institute of Southern Africa roundtable on public broadcasting: “PSB is losing its justification as an exclusive public service communication institution and can no longer claim that it alone fulfils a socially responsible role in media communication.”
The community radio model isn’t faring much better on the criticism front. Like public broadcasting, a major problem is the funding mechanism – community radio stations are legislated as section 21 “not for profit” entities, so they’re essentially hand-to-mouth operations that depend to a large extent on staff volunteerism. Again Markovitz acknowledges the challenges. “We’ll be revisiting the community radio policy in the next financial year. There are also other questions that need to be addressed that are outside Icasa’s domain. For instance, where is the funding support? How much can the MDDA (Media Development and Diversity Agency) put in? How much can government put in? Icasa is very wedded to the three-tier system, and it’s vital that community radio, where development issues are paramount, survives and gets supported.”
A watershed test for the model will be the Radio Today 1485 AM case. In the last few months Icasa’s Monitoring and Complaints Unit has received in the region of 20 submissions alleging that this community station has unilaterally amended its licence. The main issues are that Radio Today, which is licensed to service an “elderly” community, is programming for a comparatively younger audience, and (more importantly) that financial content provider MoneyWeb has begun supplying drive-time business programming to the station. Legal firm Rosin Wright Rosengarten (RWR) point out in their submission on behalf of client Classic FM that “it is important to note that MoneyWeb limited is a public company which operates for profit, for the benefit of shareholders.”
Says founding partner of RWR, Mark Rosin: “My personal view is that the station has shown a flagrant disregard for the licence that was granted to them.”
But Radio Today’s honorary chief executive, Dr. Ivan May, insists that the station has acted transparently, and his counter-argument alludes to the inherent weaknesses at the heart of community radio in general: “As Radio Today we respect the dignity of Icasa. The important thing is that the Radio Today model I inherited at the end of last year was getting into debt. Numbers is what matters in radio, and Radio Today was then the fastest-aging radio station in the world. We were charging right down to R50 an advertising spot. You can’t keep a station going on that.
“I had to expand the audience or the station would close. Yes, you can cater for 84-year-olds, but a 50-year-old does not want to hear presenters who are, in the main, over 65-years-old, some as old as 80. My licence says I can go to 50-plus English speaking, and that’s what I’m doing.”
May continues that the relationship with MoneyWeb is currently based on “goodwill” – there is no formal agreement. “Nothing is signed. A zero-based draft of a service level agreement was sent to Icasa before all this took place. We explained that the draft was the proposed agreement with MoneyWeb, and asked for comment. MoneyWeb is merely providing content and we will change the agreement however Icasa wants it.”
And here lies the rub. All profits from Radio Today (when there are any) go to three charities: Noah (Nurturing Orphans of Aids), Jafta (Johannesburg Association for the Aged) and Drive Alive. While MoneyWeb may be providing its business content for free at the moment, it ultimately has a responsibility to shareholders, not charities. If the Monitoring & Complaints Unit allows MoneyWeb to take out some form of return, it will be creating a precedent that challenges the definition of community radio in the IBA Act.
The hearing is scheduled for early October, so Markovitz isn’t saying much. But he does concede that the case has important implications. “The question of whether a commercial operator can do what MoneyWeb is doing with a community radio station is subject to the current complaints procedure. Some industry observers have argued though that if Icasa were to sanction the MoneyWeb-Radio Today arrangement it could a mean a huge flaw in the community radio model.”
Huge flaw, indeed. Any sanction without a very good explanation from the regulator (one that perhaps offers carefully prescribed “commercial” funding alternatives while protecting the integrity of community radio’s public service objectives) would signal a dangerous swing towards the FCC school of broadcast regulation thought: spout public ownership rhetoric while dealing the aces to big business.
Reflecting on how Powell’s organisation has skilfully sidelined community media in the US, Pulitzer Prize-winning journalist Ben Bagdikian writes in The Media Monopoly: “Despite the [national communications] law, in recent years both the major media operators and the Congress have acted as though its ‘public ownership’ phrases are not there or can be safely ignored. The Congress, the White House, and the Federal Communications Commission have steadily relaxed standards to permit the growing exclusion of community voices on the country’s 11,000 local commercial radio stations, 1,500 television stations, and 11,800 local cable systems.”
Luckily for South Africa, thus far Icasa’s actions and statements have been consistent.
Next month The Media will go more in-depth into the views of Michael Markovitz on commercial radio, as part of the feature on adult contemporary radio.