Watchdog calls lack of minority licensees obscene


MMTC’s David Honig did not pull his punches – at the FCC panel on how its rules affect minority broadcast license ownership, he said of the lack of owners, and the lack of much in the way of help to increase their numbers, “It’s obscene, people.”

Honig’s approach to doing something about it is pragmatic – he testified to the fact that once deregulation occurs, it is very difficult to realistically reregulate, and that forced divestitures in such an effort would only drive more capital away from the business.

But he strongly favored rapid action on multiple proposals to address the situation that he said have been sitting at the Commission gathering dust, in some cases for decades.

His big three proposals included changing ownership attribution rules in ways that encourage investment in minority broadcast businesses, clearly defining the need for diversity of ownership, and repurposing television channels 5 and 6 for FM broadcast, and using the new space as a migration destination for minority AM radio owners.

Honig said the FCC had to do much more than just regulate within its own authority. He said it should be actively pushing for the reinstatement of minority tax certificates on Capitol Hill, and that it should also be there actively fighting against the proposed imposition of a performance royalty, which he said could have devastating financial results for minority broadcasters.

At a minimum, Honig said, the FCC should take the 40 or so proposals large and small that are already before it, gather them into a report and order, circulate it on the 8th floor and have a vote – he said two months is plenty of time to accomplish this feat. Noting a loss of 50% of all minority television licensees over 10 years, and 9% of all radio licensees over just the last two years, he said, “Who’s going to turn the lights out when the last minority leaves the room if we don’t do something about it right now?”

Michael Roberts of television group Roberts Broadcasting, said that allowing foreign ownership interests in broadcast licenses was a great way to draw capital into the business, and also suggested that the rules be tweaked to allow the Small Business Administration to help minorities and women acquire broadcast licenses.

American Women in Radio and Television’s Sylvia Strobel noted that there may be only so much that regulators could do, noting that the business practices of media companies need to change to include more women and minorities. She suggested that the FCC find ways to incentivize desired management behaviors.

Faith Bautista of Mabuhay Alliance said that a slur on Filipinos in an episode of ABC’s “Desparate Housewives” brought her into the argument, and suggested that it demonstrated insensitivity to minorities, and needed to be addressed by increasing diversity in both management and ownership. She thought diversity—related conditions could be attached to approval of the pending Comcast/NBCU merger.

Testimony summaries:

* Faith Bautista, Executive Director, Mabuhay Alliance: Notes extreme lack of Asian-Americans in upper reaches of Fortune 500. ABC “Desperate Housewives” script slurred Filipino medical schools, which brought Bautista into communications policy. Filipinos rained protests on the FCC. Competition, not consolidation, is best way to insure diversity. FCC should view acquisitions through the prism of diversity. Who is one board, who do you do business with, what do you do to enhance media ownership? For example, Verizon, AT&T each assist minority-owned companies. Why not require minority diversity plan of Comcast/NBCU? Such requirements could make diversity part of corporate DNA. Allocate TARP funds for low-interest loans to minority-owned broadcast properties.

* David Honig, Executive Director, Minority Media and Telecommunications Council: Diversity is important to allow citizens to prosper to the best of their ability; minority owners tend to serve their communities with niche broadcasting; they carry minority formats; the correlation is robust and exists without any need for government compulsion. Pew notes huge importance of talk radio to African-American community, more than web, print or other outlets. As bad as licenses percentage is for minorities, media valuation percentage is even worse, less than 1%. Consolidation, access to capital are still issues. Consolidation leads to few stations going up for sale. Investors prefer multiple station transactions and incumbent buyers. Minorities have insufficient broadcast facilities upon which to build an equity base for expansion. MMTC has multiple proposals to advance minority ownership before the Commission. Three big picture items. Change attribution rules, carefully, to incubate diverse owners. Adoption of review to focus more clearly on diversity need; deal with AM radio engineering problems, allowing them to move to TV channels 5 and 6.

* Michael Roberts, Chairman and Chief Executive Officer, Roberts Broadcasting Companies: Planning to super serve community; seven other applicants claiming to be minorities competed against us. Had difficulty funding that process. Expanded in various locations. Ended up selling stations to ACME, Paxson, others, to move into digital phones. Wanted to expand in areas where they owned TV stations. Still owns four of eight African-owned TV stations. Protect digital channel opportunities be protected under must carry. Holiday on FCC fees to get past recession. Tax credits for cost of programming and buildouts would be helpful.

* Sylvia Strobel, Interim President, American Women in Radio and Television: Organization working on getting more women into broadcasting. Dealing with the fact that more women than men get college degrees, yet more men get management positions. Wants FCC to weigh changes to rules to encourage female participation in ownership and management, and examine access to capital.