Do FCC Rules Hinder Minority Ownership?

by on November 22, 2006

Communications Daily (subscription) reported Monday that Clear Channel’s upcoming sale of 448 stations will likely be structured in big blocks of licenses–with only about a dozen transactions in all. One reason, according to Comm Daily, is the FCC approval process. With big batches, the article reports, quoting a broadcast property appraiser: “They are not going to want to be involved in 400+ transactions. It would become a nightmare in terms of documentation.”

One consequence of this is that minority owners and small businesses would find it harder to buy acquire licenses, at least in the initial round. In other words, the FCC ownership rules–justified as a way to increase diversity in media–may actually be hindering minority ownership.

That surprising conclusion is consistent with a provocative paper I recently saw by David Honig of the Minority Media and Telecommunications Council. Entitled “How the FCC Helped Exclude Minorities From Ownership of the Airwaves,” Honig argues that FCC policies over the past 70 years have consistently limited, rather than expanded, minority participation in broadcasting. It’s a well-researched paper, showing that for decades the FCC was resistant to applications for broadcast licenses from minority groups.

I do have some quibbles about Honig’s conclusions. For instance, he attributes many of the earlier cases to outright segregationist views at the FCC. That may be true–especially during the 1930s and 1940s–but the refusals could also have been due to a a prejudice in favor of broad (as opposed to niche) broadcasting. Still, the result–even if not consciously discriminatory–would be the same.

Honig also cites FCC failure to adopt (or preserve) programs that explicitly aided minorities–such as EEO rules and rules providing tax and other benefits where stations are sold to minorities. But these are not cases where FCC rules hindered minority participation–here the Commission only declined to provide advantages (for good reasons). And it’s awfully hard to argue that the Commission has acted out of racist motives–at least in recent years–especially since two of out the past three chairmen have been African-Americans.

Nevertheless, Honig’s paper provides food for thought, and evidence that (willfully or not) FCC rules have often been a hindrance, rather than an aid to, minority participation in the media.

Worth reading.

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