Coming Media Ownership Draft Order Likely to Stick with NPRM, Clyburn Predicts

The media ownership order the FCC is drafting likely will stick with the provisions outlined in last year’s notice of proposed rulemaking for that quadrennial review, Commissioner Mignon Clyburn predicted Wednesday. With the caveat that she has not seen the draft, and none is circulating for a vote, she speculated at a conference that it won’t likely propose more deregulation than the NPRM. “It will probably retain many of the existing media ownership rules” including a ban on one company owning more than one broadcast network and existing limits on how many radio stations can be commonly owned in a market, Clyburn said. There may be “a minor modification or two” to existing rules, she said.

That NPRM sought to remove limits on common ownership of a radio and TV station within a market, and on a case-by-case basis authorize cross-ownership of a broadcaster and daily newspaper in the 20 largest markets. The draft order that does circulate likely will contain all those provisions, Clyburn said, citing speculation. Commissioner Ajit Pai wants the order voted on this year, he said on a panel with Clyburn at the National Association of Black Owned Broadcasters conference. NABOB Executive Director Jim Winston, who moderated the panel, said the association has opposed media ownership deregulation in the past because the changes in ownership provisions in the 1996 Telecom Act led to “huge consolidation.” The number of black owners of radio stations “fell off a cliff,” he said.

Clyburn hopes “an item will be circulating soon,” she said. The Act required the commission to have voted on a quadrennial ownership order in 2010. Broadcast and FCC officials have said Chairman Julius Genachowski and Media Bureau Chief Bill Lake have wanted to circulate an order this year. Bureau and commission spokespeople had no comment. Clyburn seeks “proactive engagement” on the issues outlined in the NPRM, she said. “Your public engagement, dare I say, is mandatory."

Now’s a good time for broadcasters to lobby Congress to get the minority tax certificate program it ended in 1995 brought back, Clyburn said. She can’t lobby on Capitol Hill, “but if you want to quote me to say I think it would be good for this nation, quote me” in meetings with lawmakers, she told the audience of black broadcasters. “If you have not had recent engagement, you can.” Two-thirds of black stations wouldn’t be owned by African Americans if there wasn’t a certificate giving tax breaks to sales of radio and TV stations to minorities, she said. “Whatever the issues there were in the past, they can be easily addressed. I think the time is ripe” to “have a full-blown campaign” to resume the program, Clyburn said. The program was ended amid concerns it was misused.

NABOB wants Congress and the administration to take several steps to remedy a decline in minority ownership of stations that has been “building for over a decade,” the group said in a list of “policy initiatives” released at the conference. The government should spend with black-owned stations “a reasonable amount” of the $800 million annually it spends on ads, the association said. Congress should bring minority tax certificates back, something NAB and FCC members have sought (CD Sept 26 p3), and pass a bill similar to the FCC’s ban to bar “racially discriminatory advertising practices,” NABOB said. “Congress should establish a program for funding purchases of broadcast and telecom” assets by minority-owned companies, the group said: “The voices of minority communities are being silenced by the decline in minority ownership.” Black companies now own 8 TV stations, down 65 percent from 1995 before the 1996 Telecom Act deregulated ownership restrictions, NABOB said. It said the number of radio stations owned by blacks fell 10 percent to 225 during that time. A petition for the FCC to allow foreigners to own larger stakes in radio and TV stations drew some concerns from industry executives, though Pai said it may help NABOB members, and Clyburn noted the rule has been waived before. Reviewing such stakes of more than a quarter in licensees on a case-by-case basis as some broadcasters and nonprofits seek could drive up prices for stations and make it harder for blacks to buy them, said Fairview Capital Partners’ Edwin Shirley. “Increased competition for a limited resource, i.e. the station” raises “the possibility of driving up prices,” said the managing director of the investment firm. AIM Broadcasting CEO John Douglas wants to see “a consortium of African nations” band together to send programming to U.S. stations, he said. To the extent such a consortium would want to own the majority of such outlets, “there could be a scenario where it could be positive,” he continued. Pai said on a later NABOB panel there are some benefits to case-by-case exceptions of the 25 percent foreign ownership cap. Minority-owned broadcasters “in particular” could benefit from easier “access to the capital they need,” said Pai, who has backed the petition.Having “certainty about the rules of the road is very important,” where larger foreign stakes aren’t banned across the board, he said. “If we can be as clear as we can up front, then it helps a lot.” The FCC has given exemptions to such rules before, as with Fox for U.S. TV stations, Clyburn said. “There is discretion there.” It “troubles me even more” to have such exceptions, Winston said. “What you want to do as an attorney, is tell your client, ’this is the line,'” he said: Changing the foreign ownership rule allows “companies that have significant financial resources to roll the dice” on whether they'll get a waiver.