JSAs Increasing Diversity Is ‘Charade,’ Wheeler says
Arguments that joint sales agreements increased opportunities for minorities before the FCC changed the rules governing them are a “charade,” said FCC Chairman Tom Wheeler in a speech at a National Association of Black-Owned Broadcasters conference Thursday. Changing the JSA rule already has increased the number of minority broadcast owners, he said, promising that more minorities and women would own stations by the time his term ends than did when it started. The conference also featured a panel of commissioners, and Rep. Maxine Waters, D-Calif., urged the agency to consider diversity as it reviews large industry deals and the incentive auction.
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Wheeler said a recent divestiture of three stations by Gray Television to minority and women owners is an example of the rule change making stations owned under JSAs attributable helping increase diversity. The FCC has encouraged broadcasters “facing living under the new rule” to spin off stations affected by it to minority owners, Wheeler said. “Hopefully, the bad old days of sidecars and financial arrangements that thwart opportunity are over.” The JSA rule is facing a legal challenge in the U.S. Court of Appeals for the D.C. Circuit from the NAB and several broadcasters.
Wheeler said more arrangements related to the JSA rule that will increase diversity are in the pipeline. He later confirmed to us that one of the deals he was referring to is Nexstar’s application for a JSA waiver (CD June 11 p9) that would let it sign a sharing arrangement with minority owned Marshall Broadcasting. That transaction is still an open proceeding, his aide Maria Kirby told us.
Spinning off formerly shared stations to minorities could allow them to become “incubators” for new entrants to broadcasting, said Wheeler. “The change in our rules does not end the opportunity for there to be a sharing arrangement.” The rule change will keep such arrangements from covering “covert consolidation,” he said. Prospective new arrangements will be judged on how well they encourage independence, he said. Commissioner Ajit Pai also endorsed the concept of incubators to increase minority access to capital, at a separate panel at the event. “If you don’t have that cash flow, you will succumb to other forces,” Pai said.
Pai criticized the commission for failing to act to update its ownership rules in the 2010 quadrennial review. “Whether you love the rules as they stand or hate them as they stand, we simply aren’t taking action,” he said. The commission’s slow pace to update the rules should be interpreted as the agency being “deliberative,” said Commissioner Mignon Clyburn. The commissioners need to collect the proper data before they make a decision that could help or hurt the media landscape, she said. The commission has a statutory obligation to complete the review, said Commissioner Mike O'Rielly. With the review slated to be completed in an election year -- 2016 -- he said it was likely to continue being passed down the road. Clyburn, O'Rielly and Pai expressed support for a rulemaking on the AM radio revitalization. The commission should vote on the item before the end of the year, Clyburn said, though Pai said his goal was a vote by Halloween.
Minorities and women need to pressure the FCC to consider diversity in its administration of the incentive auction and assessment of Comcast’s planned buy of Time Warner Cable and AT&T’s of DirecTV, said Waters in a surprise speech at the conference. The pending consolidation not only threatens media competition but also would further diminish economic opportunities for women and minorities, she said. “The FCC can’t squander the opportunities these mergers represent.” As minorities are some of the largest consumers of cable TV and mobile Internet, their interests must be considered by the FCC, she said. -- Monty Tayloe (mtayloe@warren-news.com)