High Quality
Open the downloaded document, and select print from the file menu (PDF reader required).
Minority Preferences In Federal Communications CommissionLicensing Practices and Procedures
February 23, 2000
By: Brian M. Rowlandhttp://www.brianrowland.com
This article concerns preferential policies based on racial classification carried out by the Federal Communications Commission (Commission or FCC) that pertain to theallocation of broadcast and other communication licenses granted by theCommission. An historical examination of the disparities in minority-controlledcommunications companies is followed by a review of the evolution of FCC policy and its related case law, and analysis and opinion concerning the successes andfailures of the Commission’s efforts.I. Historical Perspective African-American representation in the ranks of ownership of radio andtelevision stations and other telecommunications systems has been sparse. Prior to1949, when Jesse B. Blayton, a university professor, certified public accountant and banker, bought Atlanta’s WERD-AM, no broadcast facility in the United States had been owned by a minority.
It wasn’t until 1973, when the Commission awarded thelicense of Detroit’s WGPR-TV to WGPR, Inc., that an African-American businessowned a television station.
Since those early days of near non-existent minority representation, the Commission has taken certain remedial action.
II. Evolution of the Law Coincident to Blayton’s purchase of WERD-AM, in 1949, the United StatesDistrict Court of Appeals for the District of Columbia Circuit pronounced in
1
Tom Opdyke,
LIFE AS IT USED TO BE: WERD Is A Word In Black History,
ATLANTA JOURNAL-CONSTITUTION, October 31, 1994, Section C at 02.
2
WGPR Inc., a minority-owned company, was authorized by the Federal Communications Commission toconstruct a new television station on channel 62 in Detroit.
See
In Re App’n of WGPR Inc.,
MemorandumOpinion and Order
, 42 F.C.C.2d 836 (1973).
Also see
In Re Request by WGPR, INC., DETROIT, MICH. For Waiver of Grant Fee, 54 F.C.C.2d 297, (1975).
Johnston Broadcasting Co. v. FCC,
that the use of
comparative hearings
was theproper procedure for the Commission to use to distinguish between competingapplicants to properly award licenses to serve the public interest.
Johnston
, theCourt upheld the Commission’s choice of Thomas N. Beach (the applicant competingagainst Johnston) for a Birmingham, Alabama, radio station license, stating that“[w]hen minimum qualifications of both applicants have been established, the publicinterest will be protected no matter which applicant is chosen. From there on, thepublic interest is served by the selection of the better qualified applicant.”
The
Johnston
Court validated the Commission’s choice of Beach based on theCommission’s finding that
inter alia
Beach’s broadcast programming proposals would provide “greater opportunity for local expression than would Johnston.”
Thisemphasis on local expression serves as a foreshadowing of policies to come, which would mandate diversity of ownership as a springboard for advancing minority ownership and access to the public airwaves.In 1965, the Commission declared a need for “a maximum diffusion of controlof the media of mass communications.”
Despite that pronouncement, the policy setforth in the
1965 Policy Statement
did not concern itself with minority representation in ownership, but rather, diversification of ownership as a measure toprevent monopolization. In addition to diversification, the policy statement declaredthe criteria for comparative hearings to include full-time participation in stationoperation by owners, proposed programming service, past broadcast record, efficientuse of the frequency, personal character of the applicant, and “other factors.”
TheCommission maintained these basic criteria for comparative hearings until FCCChairman Richard Wiley prompted his staff to research and discover ways in whichthe percentage of minority owned broadcast facilities could be bolstered.In the wake of Wiley’s request, the Commission issued the
1978 Policy Statement
. The statement enunciated the use of
comparative hearing preferences
3
See
Johnston Broadcasting Co., v. FCC, 175 F.2d 351, 357 (D.C. Cir. 1949).
4
See id.
5
See id
. at 358.
6
Policy Statement on Comparative Hearings FCC,
Public Notice
, 1 F.C.C.2d 393, 394 (1965).
7
See id
at 394-400.
favoring minority applicants, the
distress sale policy
, and the award of
tax certificates
to the owners of broadcast or cable systems that sold their properties tominority-controlled businesses.
This policy change began a period of nearly 15 years in which minority ownership expanded from less than 1% of 8,500 existingstations in 1978, to 3% of over 16,000 stations by 1995.
The policies set forth by the
1978 Policy Statement,
to increase the level of broadcast facility ownership by minorities, defined minorities as “Black, HispanicSurnamed, American Eskimo, Aleut, American Indian, and Asian Americanextraction,”
and set forth three methods to increase minority ownership. First, the
comparative hearing minority preference
policy worked by adding minority ownership to the criteria set forth in the
1965 Policy Statement
. This “‘plus’ [was]awarded only to the extent the minority owner actively participate[d] in the day-to-day management of the station.”
Second, the
distress sale
was a plan whicheliminated the existing policy that “a licensee whose qualifications to hold a broadcast license [that had] come into question [could] not assign or transfer thatlicense until the FCC ha[d] resolved its doubts in a non-comparative hearing.”Instead, “[t]he distress sale policy [was] an exception to that practice, [whichallowed] a broadcaster whose license ha[d] been designated for a revocation hearing,or whose renewal application ha[d] been designated for hearing, to assign the licenseto an FCC-approved minority enterprise.”
, tax certificates
were offered to broadcasters that sold their properties to organizations with a minority ownershipshare of over 50%. The certificates “permit[ted] sellers of broadcast properties todefer capital gains taxation on a sale whenever it [was] deemed necessary orappropriate to effectuate a change in a policy of, or the adoption of a new policy by,
8
Statement of Policy on Minority Ownership of Broadcast Facilities,
Public Notice
, 68 FCC2d 979 (1978)
9
Subcomm. On Oversight of the House Comm. On Ways and Means, 103
rd
Cong
., 1
st
Sess (1995) (statement of William E. Kennard, FCC General Counsel).
10
See
Metro Broadcasting Inc., v. FCC, 497 U.S. 547, n1 (1990) (upholding the FCC’s minority preference -comparative hearings and distress sale policies).
11
See id
. at 557.
12
See id
. at 557.
Add a Comment
Louis Morrison Privette IIIleft a comment
BrianRowland replied: