The more I think about the media consolidation issue, the more I tend towards the view that consolidation might be a boon for diversity. I'm still waiting to see empirical studies, of course, but what the Armchair Analyst said (in a post I linked yesterday) seems plausible to me:

One could easily argue that more concentration of ownership would create more diversity not less. Niche markets, like techno music of libertarian talk radio, have, by definition, a smaller audience and therefore less profit potential. Though some profit may be possible, the initial investment required is too high to attract small-time media corps. A large conglomerate on the other hand, could easily divert resources to capitalize potential revenue. Think about bookstores. A mom and pop store can't afford to have an extensive philosophy section because ancient wisdom just doesn't sell in the quantities needed to pay back their investment. Borders or Barnes and Noble don't have the same problem because of the scale of their stock and sales. It costs them relatively little to set aside a shelf and a few books and rarities that might draw in a few more customers. Apply that simple model to radio and television and imagine the possibilities.

Following on that point, I would observe that even if all your local radio stations were independently owned, you would probably still find a lot more diversity of radio programming on a single source -- XM Satellite Radio.