The FCC is continuing its desperate search for a reason to exist. This year it’s decided to assert its relevance by reengaging an issue that it had ignored since 2004. The “Localism” debate has reemerged and one of the most troubling aspects of this debate is the focus on the supposed lack of ownership of broadcast television and radio stations by women and minorities. While the goal of increasing diversity in the sphere of broadcast media is a noble one, the data being used to justify new rules is specious.
Many have attempted to validate their concerns over ownership diversity by referencing a March 2008 GAO study which focuses on media ownership. However, this report admits freely that FCC data is severely lacking.
Many of you who follow TLF will note that Jerry Brito has done extensive work on government transparency and the importance of making data truly accessible–you know, putting it online rather than in a basement in the Capitol. While it’s no surprise that some agencies haven’t updated their record keeping, it is a little disturbing that the FCC–a commission charged with regulating some of the most advanced technology available–doesn’t keep adequate records. Specifically the GAO sites the problems with Form 323, the FCCs method of collecting information on broadcast station owner gender, race, and ethnicity:
Companies must file the Form 323 electronically. However, FCC allows owners to provide attachments with their electronic filing of the Form 323. These attachments may include the gender, race, and ethnicity data. Since these data are not entered into the database, the data are unavailable for electronic query.
This flaw in data collection is certainly laughable, but the most glaring deficiency is that the FCC doesn’t require sole proprietors, limited partnerships, or non-profits to report on ethnicity of owners—leaving one to wonder how it assesses this information at all. Excluding these legal entities from data collection leaves only incorporated radio stations in the group required to file FCC Form 323 which contains information on race and gender.
But how does one determine the sex or ethnicity of a corporation? Clear Channel Communications—one of the nation’s largest owners of radio stations—has issued nearly 500 million shares of stock. Has Clear Channel polled every share holder about their race or gender? It’s doubtful. It’s also doubtful that any method of determining the race and gender of the owners of corporate stations could ever be done in a way that’s meaningful or anything close to a basis for sound public policy.
I don’t think we should throw up our hands and admit defeat on this issue, however. First, we can look at the good news.
The General Accounting Office (GAO) sites survey data indicating that, contrary to popular opinion, programming diversity is on the rise thanks to consolidation noting that:
Owning multiple stations in a local market allows a single owner to program its stations with diverse formats to reach a larger share of local listeners.
Still, more can be done to ease the entry of new competitors into the broadcasting space on a race-neutral basis by embracing some much needed reforms.
The GAO report shed some light on why it’s hard for anyone—women, minority, or otherwise—to enter the broadcast market. The largest factor among the reasons cited by the GAO is undoubtedly the immense capital investment required to enter into the broadcast industry. What the GAO fails to mention is that the number of licenses granted—and therefore the number of stations that can broadcast—is made artificially low by FCC rules such as minimum power requirements and convoluted and outdated interference protections. These rules make broadcast stations artificially scarce. From there, the law of supply and demand takes over, making stations more expensive.
The FCC can open up the airwaves to more voices by allowing more low-powered FM stations begin broadcasting. By setting a minimum bar for broadcast power too high, the FCC ensures that only those with tremendous amounts of capital can transmit their message over the air.
Similarly, the lack of property rights and the inability to transfer ownership of the right to broadcast on an assigned frequency has created an artificial scarcity in radio. There is plenty of room on the dial for more voices if only the FCC would allow that excess spectrum real estate to be utilized. Rather than forcing existing stations to follow speech codes or create systems that favor certain races or one gender over another, the FCC should allow the broadcast market to grow. Increasing the number of voices on the air should be the commission’s ultimate goal, not dividing up a pie that is simply too small to go around.
Liberalizing the spectrum would allow for the emergence of far more wireless media outlets to emerge, promoting consumer choice and high quality content through competition.