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FCC Commissioners Grilled on Media Ownership

Ill. Rep. Bobby Rush ‘tired of platitudes’ from FCC on diversity of station ownership

Lawmakers took their chance to grill FCC commissioners about media ownership, and sought answers about what the agency intends to do to raise the number of minority and women station owners.

While the main topic of the hearing before the House Subcommittee on Communications and Technology Wednesday, Dec. 12, was TV spectrum-related, lawmakers queried all five commissioners about the proposed relaxation of the cross-ownership rules. An item to eliminate the newspaper/broadcast and TV/radio cross-ownership ban now circulating among the commissioners, we’ve reported.

The chairman had been aiming to get media ownership done by year-end, however pressure from Commissioner Mignon Clyburn and others succeeded in getting the vote postponed until after comments are received on a recent report that said minority station ownership is stagnant at 8% of radio stations.

California Rep. Anna Eshoo, ranking minority member of the subcommittee, asked the chairman about the agency’s commitment to diversity of media ownership.

FCC Chairman Julius Genachowski pointed to a study in the field now “looking at issues required in this area to support legal action.”

Rep. Eshoo said there should be as many voices as possible in a democracy. “This goes to the heart of democracy” and is “not something to fiddle around with.”

Pennsylvania Rep. Mike Doyle said he was glad the vote was delayed because he has some concerns about the effect relaxing cross-ownership might have on minority and female station ownership before there’s an FCC analysis of that data.

Illinois Rep. Bobby Rush upbraided all five commissioners, saying for 17 years “I’ve seen many, many commissioners come before us to discuss minority ownership. We seem to get more and more platitudes … but absolutely no performance.”

Adding that he’s fed up with the excuses that seem to come from the commission on the topic, Rush said: “I think it’s high time for you all to get serious about media ownership.”

He too, is glad the vote was postponed, noting the commission doesn’t really know the impact that changing the rules now would have on diversity.

In the 17 years the Minority Tax Certificate program was in effect, Rush said the policy that encouraged non-minority owners to sell stations to minorities produced 364 tax certificates and more than 200 media transactions totaling more than $1 billion in value. When the tax program began, minorities owned about 40 of the 8,500 broadcast stations, according to Rush. Congress killed the program in 1995 amid allegations of fraud.

“Over its lifetime, the tax certificate policy helped raise that to 333 stations [290 radio and 43 TV], along with 31 cable systems,” said Rush.

He asked commissioners what can increase diversity of media ownership now.

Chairman Genachowski said he encourages the return of some form of tax certificate policy and pointed to the recent order to implement the Local Community Radio Act. The LPFM order “will create new opportunities for minorities and others to get into the business at lower levels of capital.”

Access to capital “is at the root of all this,” said Commissioner Robert McDowell, a long-time supporter of a minority tax certificate program. He said there needs to be more incentives in general “to make it easier to convey stations from non-minority to minority owners.”

Commissioner Mignon Clyburn agreed access to capital is key, and said without the studies being completed, the FCC doesn’t have sufficient data “to move forward in any narrowly tailored approach.”

Commissioner Ajit Pai said two ideas can be implemented now without congressional action. One is allowing more investment by foreign-owned companies in U.S. broadcast holding companies; the current 25% cap limits capital investment, he said. Pai also brought up his call for the commission to study AM revitalization in 2013, saying it’s been 21 years since the agency has reviewed its AM rules. Part of the study would determine “if any of our AM rules inadvertently stand in the way of greater minority ownership on the radio side.”

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