The Telecommunications Act of 1996 was intended to untangle ownership rules and line-of-business restrictions and let free market forces prevail. The expectation was that industry structure would remain fluid and that competition and incessant technological changes would force down prices.
The immediate impact of the act was to trigger a wave of consolidation within the industry while local telephone companies continued to resist competition. The Telecommunications Act reduced the number of major media companies from 50 to 6 in 22 years. The FCC, Federal Communications Commission, did a study that concluded that the Act had resulted in a decline in the number of radio station owners. This was even during the time that the commercial stations in the United States had increased.
“Consumer activist Ralph Nader argued the act was an example of corporate welfare spawned by political corruption, because it gave away to incumbent broadcasters valuable licenses for broadcasting digital signals on the public airwaves.”
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