FCC MAY TURN TO PRIVATE SECTOR FOR MINORITY BUSINESS FUNDING
Acknowledging that the FCC might not be able to correct an imbalance in the number of minority broadcast owners by itself, a key Commission official said the agency might need to turn to the private sector for help, particularly for funding minority-owned businesses. Jane Mago, chief of the FCC’s Office of Strategic Planning & Policy Analysis and leader of a newly announced federal advisory committee on diversity, told a conference of the Minority Media & Telecom Council (MMTC) Mon. that the panel would draw on expertise from the private sector for its membership but also could need private enterprise help in confronting a lack of capital for minority businesses.
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“Capital formation is one of the key elements of what we're going to be looking at… Every time we look at what are some of the barriers to entry, what are some of the problems, one of the things that keeps coming up time and time again is access to capital,” Mago said on a panel. However, she said she didn’t think addressing that issue was “necessarily within the power of the FCC, which is one of the reasons I keep emphasizing that we may need to look for some other initiatives that are beyond ours.”
Mago said the committee, which is to advise and make recommendations to the Commission, isn’t limited to regulatory initiatives, but can be open to legislative or other solutions. She suggested that FCC Chmn. Powell was particularly interested in perhaps a legislative solution to revive a tax certificate program that at one time helped minority owners. Media Bureau Chief Kenneth Ferree, also on the panel, said the idea of an advisory committee on diversity was, in fact, borne of the recent media ownership proceeding, the staff having grown increasingly frustrated that perhaps not everything had a regulatory solution. “You know we were swinging at this pitch but it was blowing by us at the time,” he said.
Mago said she still was in the process of sifting through more than 150 nominees and volunteers who offered to serve on the committee. “That is no small task at this point,” she said with a laugh. Mago said she wanted to ensure that the committee would be representative of the various communications industries, geography, areas of expertise and other factors. She said there would be a main body of the committee and various breakout panels and working groups. Among the panels she envisions are one looking at the process of transactions and another addressing employment and advancement. Mago said she was hopeful that the first meeting would be held in Sept. The committee will set some of its own workload, she said, and she was hopeful it could produce reports and make recommendations at various intervals, much like the Media Security & Reliability Council (MSRC) that was formed after Sept. 11.
Responding to criticism of the media ownership rules recently raised by Comr. Adelstein (CD July 16 p1), Ferree said there “is no answer” in the current Report & Order. Adelstein had brought up the fact that the rules counted each noncommercial TV station as a separate entity even if it repeated the same broadcast signal across the state. Such treatment left a market such as Minot, N.D., looking as if it were bigger than a market such as Detroit, Adelstein had said. A member of the conference audience alluded to that criticism. Ferree responded that: “If somebody raises it on reconsideration, the Commission will address it. That doesn’t mean we will give you an answer. It still may be the kind of thing that’s resolved case by case.” Someone always can challenge a particular transaction by pointing out that the number of stations in a market was being counted improperly, he said.
Ferree said he hoped the Commission would issue a new proposed rulemaking for the next media ownership review in early 2004. The next biennial review won’t replicate all the parts of the one recently decided, he said, but instead will ask some questions differently or more deeply and with a new round of studies. Ferree said he specifically wanted to look at whether there was a link between ownership and viewpoint. Although one of the Commission-sponsored studies looked at the issue, that study wasn’t entirely satisfactory, he said: “We would like to know more about that connection.”
On the question of how minorities might buy stations, Ferree pointed to a part of the media ownership rules that would allow companies currently over the limit to sell what would otherwise be grandfathered clusters to small businesses. Those larger companies couldn’t sell an entire cluster to anyone other than a small business, but would have to break up their clusters. While it might be difficult for a minority member to gain access to capital to buy a single station in a consolidated market, that person might have an easier time if a cluster were available, he said.
Most attendees said the biggest issue they faced was getting financing for deals to buy stations. Said one: “You can’t buy something without money and money is the bloodlines of the broadcasting business.”