FCC Told to Relax Ownership Rules for Women, Minorities

The FCC shouldn’t single out minorities, so ownership rules can survive court challenges, said many of the filings the commission made public Tuesday. Giving blanket exemptions to socially and economically disadvantaged businesses is better than singling out all small businesses, because some small companies are owned by wealthy entrepreneurs, said the coalition. “SDBs are a subset of small businesses” that are “economically disadvantaged, but unlike other small businesses, they are also socially disadvantaged,” the groups said. “An SDB definition is desirable because it would be less [dilutive] in its impact on minorities by omitting, for example, the children of millionaires.” Coalition members include the Independent Spanish Broadcasters Association, the International Black Broadcasters Association, the National Hispanic Media Coalition and National Congress of American Indians. In a joint filing, NABOB and Rainbow/PUSH said the FCC should define socially disadvantaged businesses in the minority proceeding.

Clear Channel said an SDB is an organization owning fewer than 50 radio stations and six TV stations nationally and none in the market where it would be exempted from FCC ownership rules. “This definition is race and gender neutral, but is limited to individuals and entities that do not have a substantial presence in the broadcasting industry,” the company said. “It therefore would successfully promote ownership opportunities for new entrants without raising any constitutional concerns.” The NAB said the Supreme Court’s 1995 Adarand v. Pena decision limited government use of race-based classifications, but the high court’s 2003 ruling in Grutter v. Bollinger “suggests that the Commission might find a compelling governmental interest to create a racially and/or gender-based classification… NAB is concerned that any effort to define SDBs without a proper basis could lead to a court challenge and produce even more uncertainty that could further undermine efforts.”

Commissioners have authority to immediately approve 28 of the 34 minority proposals that the agency sought comment on, the MMTC coalition said. The filings responded to a rulemaking on proposals by the MMTC and the agency’s diversity committee (CD Aug 3 p12). NABOB and Rainbow/PUSH asked the FCC to also seek comment on proposals they had made 2003. The MMTC and diversity committee proposals ask the FCC to let stations exceeding ownership rules keep “grandfathered” exemptions when they're sold to SDBs, to relax foreign ownership restrictions, and to extend deadlines for asset divestitures when companies are trying to sell them to SDBs. But the FCC shouldn’t ease restrictions for larger broadcasters in its ongoing ownership review until the minority proposals are adopted and proved to benefit women and people of color, the coalition said. “The Commission should not adopt a package of initiatives and then turn around and also adopt structural deregulatory rules whose impact would wipe out any gains the minority ownership package could deliver,” it said. If the FCC deregulates ownership for larger broadcasters, it should do that over 10 years, the coalition said.

The NAB warned against slowing the FCC’s media rule review over what it called “unwarranted and unproven assumptions” that deregulation could hurt women and minorities. Promoting diversity “would be moot in an environment where radio and television stations are held back from effectively competing in an ever-expanding digital media marketplace.” Consumers Union, the Consumers Federation of America and Free Press said the FCC shouldn’t finish the ownership review until it more accurately determines the number of minorities who own broadcast outlets. They said 7.2 percent of stations are minority owned. “The Commission should clear this basic data hurdle prior to moving forward with rule changes that would dramatically increase local market concentration and thus decimate female and minority ownership,” the groups said. “It seems obvious that the FCC should take pause and halt its march towards consolidation.”