House Communications Leaders Eye Path Forward on Media Ownership Diversity

Senate Commerce Chairman Roger Wicker, R-Miss., hopes to begin holding post-STELA media policy hearings during Q1. “I view what we did” via the renewal “as a stopgap and I really think there may be something for everybody in modernizing” media law, he said. Wicker disagreed with those who think Congress is unlikely to be able to advance any media law revamp this year due to outside political dynamics. “Considering we have to do something by consensus, this year may be as good a time as any,” he said.

House Communications Chairman Mike Doyle, D-Pa., cautioned there’s no set notion of how the subcommittee plans to move any or all four bills it plans to examine Wednesday. He said Congress' focus on escalating tensions between the U.S. and Iran is making lawmakers’ return from the end-of-year recess “much more complicated” than earlier envisioned. The measures House Communications will examine Wednesday are: H. Res. 549; the Expanding Broadcast Ownership Opportunities Act (HR-3957); Enhancing Broadcaster Diversity and Inclusion by Verifying and Ensuring the Reporting required by Statute is Transpiring and Yielding Data Act (HR-5564); and Measuring the Economics Driving Investments and Access for Diversity Act (HR-5567).

“We just got back” from the recess last week and “we’re still putting together our agenda for the year,” Doyle said. “We’ll see what comes out” of the hearing, with “the direction that leads us in” being very much based “on what we learn and what’s said” by members and witnesses. “Several members” of House Communications and full House Commerce Committee told Doyle late last year they wanted a hearing on media ownership diversity since “they felt the FCC wasn’t doing enough to promote it.” That's why it’s the subcommittee's first panel of 2020.

Legislative 'Remedies'

“I’m hoping we can advance some remedies that the FCC can implement” given concerns few media outlet owners are women or minorities, said House Commerce Vice Chair Yvette Clarke, D-N.Y. She led filing of HR-5564, which would require the FCC to complete its equal employment opportunity enforcement NPRM (see 1904290176). The bill would limit the FCC's ability to revise rules on media ownership reports and the forms licensees use to report employment data. It would also a “public, searchable database” of media ownership and diversity information.

“There have been some programs” like the minority tax certificate “in the past that have been discontinued that I think if we modify a bit for the 21st century can help,” Clarke said. HR-3957 and Senate companion S-2433 would restore the certificate and establish tax incentives to sell assets to “socially disadvantaged individuals.” It would direct the FCC to make recommendations on ways to improve ownership diversity and develop an "incubator program." Congress rescinded the credit in 1995 out of concern it mainly helped large companies. Lawmakers have been seeking restoration ever since (see 0101170028).

“There are a number of us who are looking at widening” HR-3957’s “scope given the convergence between” tech and communications sectors, Clarke said. “We want to make sure that the language is such that it includes ownership of emerging tech firms.” The National Association of Black Owned Broadcasters cited the bill in October as an answer to the 3rd U.S. Circuit Court of Appeals’ chronic issue with ownership rules (see 1910020057).

HR-3957 restoration of the minority tax certificate “won’t cost the taxpayer a dime,” said lead sponsor Rep. G.K. Butterfield, D-N.C. “It will simply allow media owners to divest themselves of ownership and give it to a minority firm and get a tax benefit for it.” He’s hoping for bipartisan backing, saying he “mentioned it to two or three” House Commerce Republicans “informally and didn’t get any pushback.” The bill has 27 co-sponsors, all Democrats.

House Commerce Democratic leaders see HR-3957 as the “main” bill to be discussed Wednesday, though the other measures will also be important, Clarke said. H. Res. 549 would reaffirm the House’s “commitment to diversity as a core tenet of the public interest standard in media policy.” HR-5567 would require the FCC to “consider market entry barriers for socially disadvantaged individuals in the communications marketplace” in video competition reports.

House Commerce ranking member Greg Walden, R-Ore., wants to see “what progress has been made” to increase media ownership diversity and believes a general “review of the overall marketplace” is needed due to the issues highlighted during STELA recertification. He noted “in some respects the FCC’s hands have been tied” because of court decisions like the 3rd Circuit’s Prometheus IV (see 1909230067). He needs to “review what the FCC has or hasn’t done.”

Walden hasn’t made his mind up whether to support any of the four measures. “I remember back to the days when there were bonus points given in a disputed license filing for minorities” and the minority tax certificate was available, he said. “You want to do things, but first we need to figure out if a lack of access to capital is an impediment to minority ownership. If it is, we can look at options.”

A Capitol Hill review of media ownership diversity efforts is “long overdue” and “it’s critically important that Congress take action to advance ownership diversity,” said Jessica Gonzalez, just promoted to Free Press co-CEO (see personals section, this issue), in an interview. “We all know that the rates of ownership diversity in broadcast are dismally low … and I’m encouraged” by the bills House Communications will review Wednesday. The history of “discrimination in the [broadcasting] industry,” which House Commerce Democrats outlined in a prehearing memo, “deserves a much deeper look,” Gonzalez said. She’s encouraged by perceptions of “real bipartisan momentum” in the House in favor of HR-3957 and the other three measures. “These are a narrow set of remedies and we probably need more remedies than this,” but it’s an important start, Gonzalez said.

Testimony

Multicultural Media, Telecom and Internet Council CEO Maurita Coley and three other witnesses backed HR-3957 and the other bills, in written testimony.

“Collectively, this legislation seeks to reestablish the FCC’s commitment to employment and ownership diversity, and the significance of access to capital as a means to ensure ownership diversity,” Coley says. HR-3957 “laudably proposes to reinstate a version of the former tax certificate policy.” The tax certificate policy “opened doors that allowed Radio One to purchase three of its earliest radio stations using the tax certificate and build a major broadcast company whose stock is publicly traded, Coley says. She backs “extending the tax certificate policy” in the bill “to advance opportunities for minorities and women in cable and telecommunications businesses as well.”

Restore the tax certificate, says National Urban League Senior Vice President-Advocacy and Policy Clint Odom. The “bill is ready to go. Tax certificates recognize realities of the modern media marketplace and could give new players an opportunity to get into the game.” Any “legislation that examines data around ownership and employment represents a sound basis for policy making,” he says. HR-5564 and HR-5567 “represents a common-sense approach for any diversity legislation or policies. With respect to EEO data, we have not collected nor made available the data for nearly 20 years. We can’t afford to keep these blinders on.”

Santa Clara University School of Law professor Catherine Sandoval backs “Congress’ consideration of the legislation before this committee to promote media diversity through adoption of a tax certificate policy, EEO data collection and reporting, require the FCC to study market entry barriers for socially disadvantaged individuals in the communications marketplace.” She recommends “Congress direct the FCC to conduct a study that complies with the requirements of 'Adarand' to examine minority, female, and disadvantaged individual FCC license ownership opportunities and their relationship to FCC media ownership policies.”

ShootingStar CEO Diane Sutter, on behalf of NAB, notes that group’s longtime support for reinstating the tax certificate. The “program has proven to be an effective mechanism for bringing more women and people of color into station ownership and the broadcast industry expresses its strong support and interest in working with you to reinstate it on a bipartisan basis,” she says. NAB wants Congress “to examine whether modifications to the statutory guidelines for [Small Business Administration] loan guarantees, including the size of its guarantee and valuation of an FCC license, might better incentivize lending to small entities that lack tangible property or their own business track record.”