Reps concerned about private equity deals


A pair of powerful US Reps are concerned about private equity companies, saying the term "suggests a financial management style focused on cutting costs, increasing revenues and the ultimate resale of the enterprise," which may conflict with the public interest obligations of FCC licensees.

On the other hand, they note, such enterprises are somewhat insulated from Wall Street pressure to boost stock prices, which could be a plus. They want to know how the ins and outs of such companies when cutting deals on the FCC's turf. The two reps are Energy & Commerce Committee heavy-hitters John Dingell (D-MI) and Ed Markey (D-MA). They've asked FCC Chairman a series of questions on this topic, in large part due to the pending plan to take Clear Channel Communications off the stock charts.

They want to know if the FCC has any compiled stats on such ownership groups, their impact on localism, their impact on consumer protection, and their impact on media ownership rules, particularly when it comes to attribution. They wonder if private equity participation in FCC areas should result in tweaking "debt-plus-equity" attribution rules. They are curious as to whether the FCC has trouble with financial and managerial transparency when dealing with such companies, what issues he thinks the FCC should be concerned about and what plans the FCC has regarding a study of this matter.

They stated their concerns, saying, "These historical styles may not be consistent with many of the core public interest and localism values that Congress has assigned to local media outlets and may implicitly undermine the Commission's media ownership rules.