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To add insult to injury, the FCC is now seeking the Supreme Court’s approval for changes in regulations it made in 2017 that, among other things, relax the agency prohibitions on ownership across different media. (Photo: PJMixer / Flickr)

To add insult to injury, the FCC is now seeking the Supreme Court’s approval for changes in regulations it made in 2017 that, among other things, relax the agency prohibitions on ownership across different media. (Photo: PJMixer / Flickr)

The FCC Seeks to Hinder Female and Minority Broadcast Ownership for Policies Favoring Concentrated Corporate Ownership

The Supreme Court, hearing a challenge on Tuesday, should reject insufficient regulatory oversight.

Beth BrodskyDaniel A. Hanley

Over the last 17 years, the Federal Communications Commission has abandoned its Civil Rights Era stance and policies on female and minority broadcast ownership. As a consequence of its actions, the agency is handing control of media ownership outlets such as radio and television broadcasting stations to multimillion-dollar companies.

Last week, the FCC sought the Supreme Court’s endorsement to radically restructure America’s broadcast communication ownership, a move sure to be detrimental to women and minorities. The agency based its justifications on a flawed analysis and a distorted view of its historical mission. The Supreme Court should reject the agency’s deregulatory attempts, and the incoming Biden administration should develop a policy to improve economic equity and elevate women and minority ownership in the broadcasting industry.

The FCC is the national telecommunications regulator. Congress created the agency during the New Deal in 1934 and endowed it with broad structural powers to manage the entire communications sector, including the radio, telegraph, and television industries, and eventually the satellite, cable, and internet industries. With its broad structural authority, the agency is supposed to ensure that broadcasters serve the public interest. However, an agency without policies to ensure equity in ownership is not acting in the public interest.

The lack of diversity among broadcast station owners leads to a lack of diversity among reporters, editors, and others who decide what is news, what content is broadcasted, and how different demographic groups are depicted in the media.

Soon after its inception in regulating a burgeoning new industry, the FCC created policies to further its public interest mandate by deconcentrating communications markets. The FCC specifically chose to operate in line with an anti-monopoly framework to prevent any individual corporate entity from obtaining unchecked and undue power over America’s communication systems. For example, the FCC in 1941 required NBC to divest its “Blue Network,” which subsequently became ABC due to the agency’s concern that NBC held too much power in the radio industry. In 1975, the FCC developed cross-ownership rules to encourage local ownership, and to prevent a single corporate power from becoming the sole voice of a local community through owning and acquiring multiple television, radio, and newspaper outlets.

During the late 1960s, however, the FCC came to understand that its policy to promote local ownership and deconcentrate corporate ownership were still not sufficient to achieve racial equity. In 1971, only 10 of the 7,500 radio stations (0.13%), and none of the 1,000 television stations in the United States, were minority-owned.

The FCC also concluded the lack of representation in broadcast ownership deprived the marketplace of diverse broadcasting content. Seeking to remedy this public interest failure, the commission began to explore ways to more directly promote diversity of ownership, which in turn would produce diverse content viewpoints and that would also better reflect the needs and tastes of a station’s community.

The FCC became aware that station ownership significantly affected editorial content.  This view was deeply informed by a landmark report released by the Kerner Commission, a research group during the Johnson Administration tasked with explaining causes of the 1960s civil unrest and recommending  policy solutions to prevent its recurrence. The Kerner Commission found substantial evidence that broadcasting content can be biased and skew the general public’s perception of a racial group. Another major study at the time concluded that “Forty percent of the white children attributed their knowledge about how blacks look, talk, and dress to television[.]” It was clear that whomever controlled the station controlled the content that was broadcasted to the public, and subsequently, how others perceived racial and gender groups.

Responding as well to increased pressure from civil rights and women’s rights groups, the FCC enacted new rules known as the Minority Ownership Guidelines in 1978. The guidelines made minority status a “qualitative enhancement” in a broadcast license application. The guidelines also provided tax certificates to broadcast owners to sell their stations to minorities. Soon after its enactment, the guidelines were quickly extended to women.

In effect, the guidelines incentivized and provided financial backing to gender and racial groups that were vastly underrepresented in the broadcasting industry. As such, the guidelines helped create a new and diverse set of broadcast owners by promoting competition and remedying a historical injustice.

In combination with the FCC’s longstanding policies limiting corporate concentration and promoting local ownership, the Guidelines brought substantial racial and gender diversity to the broadcast industry. Between 1978 (when the Minority Guidelines were adopted) and 1995 minority ownership in broadcast tripled, and the absolute number of minority owned stations doubled. After creating the first substantial increase in minority and female ownership in the broadcasting industry, the FCC’s policies and others eventually earned the affirmative backing of the Supreme Court (although the court eventually reversed its original position).

This progress would be increasingly undermined in subsequent years, however, as Congress, the Courts, and the FCC itself began reversing policies that had long promoted local ownership and held back monopolization of the airwaves by distant corporations. Moving in line with a broader retreat from antitrust and managed competition promoted by the Reagan Administration as well as many Democrats, the FCC soon adopted a pro-monopoly stance that allowed a few dominant players in broadcast markets to proliferate, making it increasing difficult for smaller players of all background to survive.

The consequences of the past year’s concentrated ownership has led to men receiving 63% of bylines across all media platforms, while women received only 37%.

This meant the positive effects of the1978 Guidelines in promoting diversity were increasingly undone by the negative effects of increased corporate concentration and a more general retreat from structural regulation. The 1996 Telecommunication Act, played a particularly devastating role in this setback. The Act eliminated multiple, decades-long FCC competition safeguards, including how many television stations an entity could own. This led to larger broadcasters such as Disney and Viacom being able to gobble up huge numbers of smaller firms, including a disproportionately high number of firms owned by minorities and women. A study from Free Press cited the FCC’s 1990s pro-consolidation policies as one of the critical policies that led to the loss of over 40% of minority-owned stations by 1998. American sociologist Eric Klinenberg, in his book Fighting for the Air, wrote that minority stations getting acquired by dominant broadcasters “[showed] little interest in local content, whether it be news reporting or music programming.”

The FCC continued to erode and repeal many of its structural policies in 2003. By 2005, the agency’s 1980s pro-monopoly policies were having their effect on both consolidation and ownership. From the advent of the FCC’s deregulatory/pro-monopoly agency in the 2000s, the climb decreased precipitously. Between 1997 and 2001, the number of radio minority-owned stations declined by 14%. Black Americans have been hit exceptionally hard as the number of black-owned rations stationed has declined by 50% between 1996 and 2012. Since then, while people of color have grown to almost 40% of America’s population, they only make up only 2% of television ownership, 5% radio ownership, and 1% of industry asset value. The same patten applies to women-owned stations. According to the FCC’s most recent data only 8% of commercial FM radio stations and 7% of full-power commercial television stations, are owned by women (roughly the same as it was in 1988). Despite this, the FCC has touted that eliminating its local ownership rules has made broadcasting more responsive to community needs.

The lack of diversity among broadcast station owners leads to a lack of diversity among reporters, editors, and others who decide what is news, what content is broadcasted, and how different demographic groups are depicted in the media. Modern evidence continues to reaffirm the Kerner Commission’s findings that ownership dictates content. The consequences of the past year’s concentrated ownership has led to men receiving 63% of bylines across all media platforms, while women received only 37%. The latest December 2020 Nielsen report reflects that “women, Native Americans and Latinx people were among the most underrepresented groups relative to their numbers in the general population.” A 1999 study also showed that minority-owned stations aired more racially diverse programming, women’s issues, live coverage of government meetings, minority-formatted music programs, current events, and issues related to senior citizens. The FCC itself found in 2011 that increasing minority ownership increases minority-targeted programming in a market.

To add insult to injury, the FCC is now seeking the Supreme Court’s approval for changes in regulations it made in 2017 that, among other things, relax the agency prohibitions on ownership across different media. Perversely, the FCC argues that when a corporate oligopoly buy out locals newspapers, radio, and television stations this actually increases diversity—ignoring the FCC’s historical and continuing mandate increase diversity by not allowing a single entity to monopolize the media environment of any community. 

The FCC’s efforts to undue anti-monopoly protections have now gone through a total of four lawsuits. Most recently, the Third Circuit Court of Appeals, which has repeatedly reviewed the FCC’s deregulatory attempts, was not so easily persuaded by the agency’s justifications and lackluster evidence. As the court aptly noted, the FCC’s methodology was deeply flawed and “so insubstantial that it would receive a failing grade in any introductory statistics class.”

The FCC has also repeatedly ignored the Third Circuit’s orders to gather the data necessary to evaluate how its policies are directly or indirectly affecting diversity. The court stated that the FCC is “within its right to adopt a new deregulatory framework [but only so long as it gives] a meaningful evaluation of that effect [on minorities and women].” This assertion is in line with Congress’s historic and continuing mandate on the support women and minorities in broadcasting. One wonders if the FCC simply does not want to admit or unequivocally confirm that its pro-monopoly agenda is harmful to women and minorities.

In FCC v. Prometheus Radio Project, the Supreme Court will determine whether the FCC’s deregulatory policies are allowed. Oral argument took place last Tuesday. Ideally, the Supreme Court should redirect the FCC to return to its New Deal/Civil Rights era mission when rewriting its ownership rules. 

The Supreme Court decision will strongly inform how the FCC goes about fulfilling its mandate from Congress that it review ownership regulations by 2022, a process that is now open for public comment. In the meantime, the incoming Biden administration should use its appointments to the FCC and other means of influence to ensure that it returns to its original mission of promoting true diversity and social justice.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

Beth Brodsky

Beth Brodsky was a former Louis Brandeis Law and Political Economy Fellow at the Open Markets Institute. Message her on LinkedIn.

Daniel A. Hanley

Daniel A. Hanley

Daniel A. Hanley is a Senior Legal Analyst at the Open Markets Institute. Follow him on Twitter at @danielahanley.

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