Minority Commercial Broadcast Ownership in the United States

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Minority Commercial Broadcast Ownership in the United States CHANGES, CHALLENGES, AND CHARTING NEW COURSES: Minority Commercial Broadcast Ownership in the United States The Minority Telecommunications Development Program National Telecommunications and Information Administration United States Department of Commerce December 2000 THE SECRETARY OF COMMERCE Washington, D.C. 20230 Today’s broadcast companies find themselves in a dynamic marketplace. New digital technology is greatly expanding the options for using our Nation's airwaves. Many traditional broadcast rules, including those addressing financial interests and syndication, ownership, and equal employment, no longer exist or have been relaxed. Many television broadcast companies have recently acquired cable and Internet holdings. This changing landscape poses new challenges and opportunities for broadcasters and our Nation. As we forge new paths, we must hold fast to the values of diversity and localism that have long served ourNationwell. For almost a century, we have promoted diversity of independent editorial viewpoints and guarded against undue media concentration. We have labored to prevent the potential monopolization of the marketplace of ideas, to protect the needs of local communities, and to promote the free exchange of diverse viewpoints and information. We have supported policies that would increase opportunities for minorities, women, and small businesses to participate fully in the broadcast industry. Despite our laudable efforts, minorities still own less than four percent of all the commercial broadcast stations in the United States, while representing 29 percent of the population. Clearly, there is much more work to be done. Changes, Challenges, and Charting New Courses: Minority Commercial Broadcast Ownership in the United States is part of the Commerce Department’s continued commitment to promoting greater opportunities for all Americans in the communications arena. This report examines the current state of minority commercial broadcast ownership in the United States and provides critical, empirical data about such ownership in this ever-changing industry. The information set forth in this report will provide a basis for policymakers and business to undertake initiatives that serve to increase opportunities for minorities to own viable telecommunications enterprises. The Department looks forward to working with industry to ensure greater participation by all Americans in the broadcast industry. Norman Y. Mineta CHANGES, CHALLENGES, AND CHARTING NEW COURSES: Minority Commercial Broadcast Ownership in the United States UNITED STATES DEPARTMENT OF COMMERCE Norman Y. Mineta, Secretary Robert Mallett, Deputy Secretary NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION Gregory L. Rohde, Assistant Secretary for Communications and Information Kelly Klegar Levy, Associate Administrator, Office of Policy Analysis and Development Minority Telecommunications Development Program Maureen A. Lewis, Director Chanda Tuck-Garfield, Associate Director Sheree Stalling, Administrative Assistant Project Contributors Art Brodsky, Director of Communications Sallianne Fortunato, Telecommunications Policy Analyst Jeffrey Joyner, Senior Counsel Sandra Laousis, Telecommunications Policy Analyst James McConnaughey, Senior Economist Kathy Smith, Chief Counsel ECONOMICS AND STATISTICS ADMINISTRATON Gwendolyn Flowers, Chief Economist David Payne, Economist Acknowledgments The Department would like to thank all the minority broadcasters who contributed to this effort. The Minority Telecommunications Development Program wishes to thank Milton Brown, Jaron Charles, Lan Chu, Fahima Danishgar, Teresa Goode, Tanya Holmes, Josephine Johnson, Josephine Scarlett, Mary Smith, and Mary Stewart of NTIA, Kevin Matthews and Melanie Cook of MBDA. Special thanks to Ruth Ann Bramblett, Stacy Furukawa, David Lassman, Kristin Stettler, Thomas Zabelsky, William Davie, Jr., Kathy Tuck, Maurita Coley of Cole, Raywid & Braverman, Edward Jones, Jr. of UDC Cable 19, David Honig of the Minority Media and Telecommunications Council, James Winston and Lois Wright of the National Association of Black Owned Broadcasters, Francisco Montero of Shaw, Pittman, Potts & Trowbridge, S. Jenell Trigg of Fleischman & Walsh, Michael Sullivan of the Community Broadcasters Association, Dahlia Hayles of Rainbow/PUSH Citizenship Education Fund, and others who contributed to this report. TABLE OF CONTENTS INTRODUCTION ........................................................... EXECUTIVE SUMMARY .................................................... I. HISTORY OF NTIA’S ROLE IN PROMOTING MINORITY OWNERSHIP ... 1 Minority Broadcast Ownership Reports ..................................... 3 2000 Minority Broadcast Ownership Report Methodology ....................... 4 Public Comments ...................................................... 6 Minority Ownership Roundtable ........................................... 6 II. MINORITY OWNERSHIP - CURRENT AND PROPOSED DEFINITIONS .... 7 NTIA’s Definitions ..................................................... 8 Federal Communications Commission’s Definition ............................ 9 Small Business Administration’s Definition ................................. 10 The Telecommunications Ownership Diversification Act’s Definition ............. 11 National Minority Supplier Development Council’s (NMSDC) Definition ......... 12 Public Comments ..................................................... 13 The 2000 Report’s Definition and Further Considerations ...................... 14 III. VIEWPOINT DIVERSITY IN A CHANGING INDUSTRY ................. 14 The Emergence of Broadcast Ownership Diversity As a National Goal ............ 14 The Changing Broadcast Industry ......................................... 24 Multiple Ownership Rules ......................................... 24 The Telecommunications Act of 1996 and the Aftermath of Consolidation ... 29 IV. CHALLENGES OF CONSOLIDATION ................................. 34 The Data Story for Minority Owners ....................................... 34 Industry Overview ............................................... 34 Radio ......................................................... 37 Television ..................................................... 44 2000 MTDP Survey Results ............................................. 47 Broadcast Industry Experience ..................................... 48 Impact of Telecommunications Act of 1996 ........................... 49 Competitiveness of Minority Owners ................................ 51 Business Difficulties ............................................. 51 Advertising Revenues ............................................ 52 Station Purchases and Sales ....................................... 53 Government Policies to Assist Station Acquisitions ..................... 55 Internet Broadcasting ............................................ 56 Continuing Challenges ................................................. 56 Advertising .................................................... 56 Access to Capital ................................................ 58 Broadcast Industry Employment .................................... 60 Need for Tax Certificate .......................................... 61 V. CHARTING NEW COURSES: Broadcasters Moving Beyond Single Station Ownership and Conventional Technologies ............................... 64 Multiple Station Ownership ............................................. 64 Public Equity Financing ................................................ 64 New Technologies .................................................... 65 CONCLUSION ............................................................ 67 APPENDIX A : 2000 MTDP Survey and Accompanying Letter ....................... 69 APPENDIX A-1: 2000 MTDP Telephone Survey ................................. 77 APPENDIX B : Nielsen Media Research Listing of Designated Market Areas (DMAs) by Ranking ............................................................. 79 APPENDIX C: Map of Radio Ownership in the U.S. ............................... 82 APPENDIX D: Map of Television Ownership in the U.S. ........................... 83 APPENDIX E: Minority Population Map for Year 2000 (Actual 1999) ................. 84 APPENDIX F: Minority Population Projection Map for Year 2005 .................... 85 APPENDIX G: Minority Population Projection Map for Year 2010 .................... 86 INTRODUCTION Gregory L. Rohde Assistant Secretary for Communications and Information Administrator, National Telecommunications and Information Administration On the tenth anniversary of the National Telecommunications and Information Administration’s (NTIA) efforts to compile and report information on minority commercial radio and television ownership in the United States, we review the history of such ownership and the role of viewpoint diversity in a changing industry. We also continue our data collection efforts, examining the current status of minority commercial broadcast ownership in the United States. The report is the product of a written survey of minority broadcast owners, written comments solicited through a Federal Register notice, comments offered at a public meeting held on July 18, 2000, and analysis of publicly available information, including a commercial database. The data presented in this report will assist NTIA’s Minority Telecommunications Development Program (MTDP), as well as the policymakers, legislators, broadcast industry members, academicians, and consumer advocates with whom it works, in increasing
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