Promoting Diversification of Ownership in the Broadcasting Services

Chairman Julius Genachowski
Commissioner Robert McDowell
Commissioner Mignon Clyburn
Federal Communications
Commission
445 12th Street, SW
Washington, DC 20554

Re:            

MB
Dkt. No. 09-182, 2010 Quadrennial Review – Review of the Commission’s Broadcast
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996
MB
Dkt. No. 07-294, Promoting Diversification of Ownership in the Broadcasting
Services

Dear Chairman Genachowski,
Commissioner McDowell, and Commissioner Clyburn:

 On behalf of the undersigned
members of The Leadership Conference on Civil and Human Rights, a coalition
charged by its diverse membership to promote and protect the rights of all
persons in the United States, we write to offer our views in this proceeding,
and to express our concern that the Commission is falling short on its
affirmative obligation to promote diversity in media ownership.  

The civil rights community
has long regarded the expansion of minority and female ownership in media as an
important goal because of the powerful role the media plays in the democratic
process, as well as in shaping perceptions about who we are as individuals and
as a nation. Though the most recent numbers available (which are already out of
date) demonstrate that ownership diversity is, in the Commission’s own words,
“dismal,” the Commission’s notice fails to take into account its new proposal’s
impact on ownership diversity.  This omission will further exacerbate already
low levels of ownership by women and people of color, break a string of past
Commission promises, and also violate the mandate of two decisions by the U.S.
Court of Appeals for Third Circuit.^[1]  We urge the Commission to immediately take action to improve its data collection
about the ownership of women and people of color, to improve its record on how
to increase that ownership, and to cease any and all proposals to permit
further media consolidation until it can comply with the court mandate.^[2] 

Current ownership levels
by women and people of color are “dismal.”  The Commission has recognized that, despite efforts to promote
broadcast station ownership by people of color and women to foster diversity,
“the overall level of minority and female ownership in the broadcast industry
remains dismal.”^[3] 
This conclusion is borne out by the available data.

People of color and women
control very small percentages of broadcast stations.  For example, a study by
Free Press using 2007 data found that people of color controlled 3.15 percent
of full-power commercial television stations, while women controlled 5.87
percent.^[4] 
The study also tracked a sample of forty stations that were minority-owned in
1998 and found that seventeen were subsequently sold to non-minority owners. 
Of the seventeen, nine of these transactions would not have been possible under
the prior, more restrictive, ownership rules.  Of the eight sales that would
have been permitted under the old ownership rules, seven were “to large station
group owners, and may not have occurred if not for the pressures of increased
industry consolidation.”^[5] The study concludes that the relaxation of media ownership rules has negatively
affected minority and female owners and prevented these groups from achieve
ownership rates in harmony with either the general population or other
industries.^[6] 

In 2007, Free Press released
a similar study on minority and female ownership of full-power commercial radio
stations, finding that 7.7 percent of full-power commercial radio stations were
owned by people of color and 6 percent were owned by women.^[7]  It  also found that
“white male… station owners tend to own more stations than their minority and
female counterparts,”^[8] and that markets with minority and female owners tend to have fewer stations
per owner,^[9] suggesting that minority and female owners are more successful in markets with
less concentration.  The study concludes that in radio, as in television,
increased ownership concentration negatively affects minority and female
owners.^[10] 

A 2009 study by Professor
Catherine Sandoval combined Free Press’s research with additional sources to
produce a more comprehensive analysis of minority ownership of commercial,
full-power radio stations.^[11] In particular, Sandoval incorporated data from the FCC’s Application database,
allowing her to examine the ownership of 11,249 AM and FM stations. Her study
found that 815 radio stations (7.24 percent) were owned or controlled by people
of color.^[12]

Sandoval found that overall
minority ownership has “remained flat” between 2007 and 2009, even as the
number of commercial radio stations increased.^[13] The study also found that 53 percent of minority owners obtained their first
licenses prior to the enactment of the Telecommunications Act of 1996, which
“ended restrictions on the number of stations a corporation could control
nationally and dramatically raised the number of stations that could be under
common control in a local market.”^[14]

The limited data provided in
the NPRM provide a similarly gloomy snapshot of television station ownership by
people of color and women.  As noted in the NPRM at ¶¶155-56, Commission staff
has reviewed the 2009 biennial ownership filing of full power television
stations, finding that, out of a total 1,394 stations,  9 (0.6 percent) are
owned by African Americans, 10 (0.7 percent) by American Indians or Alaska
Natives, 9 (0.6 percent) by Asian Americans, 1 by Native Hawaiian or Pacific
Islanders, and 36 (2.6 percent) by Hispanics or Latinos, for a total of 65 (4.6
percent) minority-owned stations. ^[15]

The Commission cannot
continue to ignore the mandate of the U.S. Court of Appeals:  it must consider
the impact on ownership by women and people of color before it permits
further consolidation.  In light of
this data, it is shocking that the Commission has ignored court directives not
once, but twice, to delay further media consolidation until it considers its
impact on ownership levels by people of color and women.  In 2002 the U.S.
Court of Appeals for the Third Circuit reversed proposed media consolidation
rules because, in part, the Commission had ignored its obligation to look at
both issues together. The court directed that on remand, the Commission was to
consider “proposals for enhancing ownership opportunities for women and people
of color which the Commission had deferred for future consideration” and
specifically told the Commission to consider the proposals “at the same time”
it addressed other questions on remand.^[16] 
Despite this directive, the Commission launched its 2006 Quadrennial Review
without seeking comment on specific proposals to address ownership by people of
color and women.^[17] 
It was only after a public outcry that the Commission issued a second notice on
the matter.^[18] 
Despite the court directive, a second notice, and a full record, the Commission
in its decisions issued at the end of 2007 nonetheless failed to analyze the
impact of the rule changes it made on ownership opportunities for women and
minorities.^[19] 

In its review of the
Commission’s decision, the Third Circuit concluded, “[d]espite our prior remand
requiring the Commission to consider the effect of its rules on minority and
female ownership, … the Commission has in large part punted yet again on this
important issue.”^[20]  
The court’s directive could not be more clear:  “We re-emphasize that the
actions required on remand should be completed within the course of the
Commission’s 2010 Quadrennial Review of its media ownership rules.”^[21] 

Despite
the court’s unambiguous directives, the Commission is now proposing to postpone all meaningful diversity-related action until 2014.  The NPRM states at
¶158 that “[a]lthough we would prefer to be able to propose specific actions in
response to the Third Circuit’s remand of the measures relying on the eligible
entity definition in this NPRM, we believe that making legally sound proposals
would not be possible based on the record before us at this time.” Instead, the
Commission proposes to undertake certain action in preparation for the 2014
Quadrennial Review.^[22] 

This
proposal is simply unacceptable.  The Commission’s decision to delay action
until the next Quadrennial Review violates the Court’s order and is not
consistent with the Commission’s previously-stated priorities.  Simply put, the
Commission may not relax any of its broadcast ownership limits until it has
fully complied with the court’s mandate.

The
Commission must remedy its failure to collect and analyze adequate data.   The Leadership Conference, along with several
members of the coalition, have been asking the Commission to improve its data
collection and release for years.  It has been 14 years since the FCC expanded
its collection of ownership data on Form 323 to include race and gender, and the
public has yet to see a complete and accurate collection and release of this data. 
The Commission’s  failure in this regard has greatly affected its ability to
create sound policy.

The Commission has ignored
repeated requests to address this issue in a meaningful way.  According to comments filed in 2006, the United Church of Christ,
OC Inc. and National Organization for Women: “While the FCC does collect this
information, it collects incomplete data and fails to make this data available
to the public in a timely manner. … [S]ole proprietors and partnerships of
natural persons are exempt from filing.  Moreover, because group owners need
only file once for all of their stations, it is difficult for the staff to
determine whether every station has filed.  Most importantly, the FCC staff
conducts no analysis of the data relevant to the reason for its collection…. It
took two years for the FCC to even post the 2001 data.  Nor does the FCC
perform the most basic types of analysis, such as breaking down the data by
type of station ownership or geographic location.”^[23]

As UCC OC Inc. noted in its
2007 comments, even the FCC’s own economists had concluded that, “the data
currently being collected by the FCC is extremely crude and subject to a large
enough degree of measurement error to render it essentially useless for any
serious analysis, while a study by the FCC staff admitted that data provided by
the Media Bureau were “noisy and incomplete.”^[24] 
Similarly, NOW and others pointed out how the studies commissioned for the 2006
Quadrennial review “were hampered in achieving their intended purpose by
insufficient data regarding women’s ownership of broadcast stations.”^[25]

As
we lay out below, though the Commission adopted
improvements to the Form 323 data collection process in response to these
complaints, these improvements have never been effectuated. 

In May 2009, the Commission
improved its data collection to limit the number of exceptions to the data and
directed its staff to revise Form 323’s electronic interface so that the
ownership data “is incorporated into the database that is searchable, and can
be aggregated and cross-referenced.”^[26]  Yet the data was not collected until more than a
year later, and was not released until February 2011.  The first analysis of
the July 2010 data was not released until early 2012, with the release of the NPRM
in this docket.  Although this analysis reports minority ownership, it does so
for only one category of stations – full power commercial broadcast television
stations.  It does not report on the data for low-power television stations, a
service that was intended to offer ownership opportunities for minorities and
women.  Nor does it examine AM radio or FM radio, which is thought to provide
entry points for minorities and women.  Moreover, the Commission’s analysis
consists entirely of tallies, which count the total number of full-power
commercial television stations owned by minorities.  The Commission does not
examine the interaction between minority ownership and other variables, does
not offer any conclusions based on its data, and provides no analysis
whatsoever of female broadcast ownership.

Researchers that have tried
to analyze the data on their own have found the documentation insufficient. There
is no searchable database, and the data released has to be downloaded into a
database program that it not widely used and is expensive to purchase. 

Flawed
collection methods and missing data have resulted in significant gaps in the
Commission’s analysis. The NPRM acknowledges at ¶156 that the Media Bureau has
no information for 64 stations, or 4.5 percent of the total, and that it was
not able to categorize the race or ethnicity of 244 stations, or 17.5 percent of
the total.  Moreover, the Commission’s ownership data is incomplete because of
its decision to exempt certain broadcaster owners from the data filing
requirement because it concluded that it had not given sufficient notice under
the Administrative Procedure Act.^[27] 
Although the Commission indicated in October 2009 that it would seek comment on
whether to include the non-attributed owners,  it has never taken the necessary
step of Federal Register publication to initiate that process.  This
information is needed to assess whether the FCC’s changes in the attribution
rules designed to help minority and women owned broadcasters to attain
financing are working as intended.

The
FCC has recognized that any meaningful analysis of minority and female
ownership trends requires a longitudinal analysis of ownership.^[28] 
The Commission now has data from the Free Press studies for 2007, as well as
its own data for both 2009 and 2011. Yet, the Commission has not provided any
longitudinal analysis.  In fact, it has not yet made the data sets from the December
1, 2011 filings available to the public at all.

Finally, the FCC has not
commissioned any outside studies regarding broadcast station ownership by
minorities and/or women.  In response to the Media Bureau’s Public Notice
announcing the studies it was undertaking and seeking suggestions for additional
studies, UCC, NOW, the Communications Workers of America and others expressed
concern that none of the studies were intended to assess the impact of the
ownership rules on minority and female ownership.^[29] 
However, the Commission has not conducted any further studies, rendering the
record incomplete. 

The Third Circuit made clear
that the Commission’s job is to collect the data it requires.  In Prometheus
II, the Court acknowledged that the Commission’s 2009 Order set “in motion
a process for collecting better data as a basis for informed policy making.” ^[30]  It found
that “[w]hile this is certainly a welcome and long overdue step, it does not
remedy the existing data gat in the Diversity Order.  We anticipate that it
will, however, lay necessary groundwork for the Commission’s actions on
remand.”^[31] The Court elaborated that:

Stating
that the task is difficult in light of Adarand does not constitute
‘considering’ proposals…. The FCC’s own failure to collect or analyze data, and
lay other necessary groundwork, may help to explain, but does not excuse, its
failure to consider the proposals presented over many years.  If the Commission
requires more and better data to complete the necessary Adarand studies,
it must get the data and conduct up-to-date studies, as it began to do in 2000
before largely abandoning the endeavor. We … anticipate that [the FCC] will act
with diligence to synthesize and release existing data such that studies will
be available for public review in time for the completion of the 2010
Quadrennial Review.^[32]

Instead, the Commission
concludes in its notice at ¶158, “We recognize that the data currently in the
record of this proceeding are not complete and are likely insufficient either
to address the concerns raised in Prometheus II or to support race- or
gender-based actions by the Commission.  Although we would prefer to be able to
propose specific actions in response to the Third Circuit’s remand of the
measures relying on the eligible entity definition in this NPRM, we believe
that making legally sound proposals would not be possible based on the record
before us at this time.”

The Commission’s failure in
light of the need and the court’s directives are difficult to comprehend
particularly for an agency that has championed data-driven decision-making.^[33] 
The Commission is ignoring the impact on ownership by women and people of color
and is failing to get the data it needs to address the problem.  These actions seriously threaten the likelihood of
getting diverse viewpoints through the airwaves, and is a matter of grave
concern for the constituencies that The Leadership Conference represents.

We plan to actively participate
in this proceeding and would appreciate meeting with you at the earliest
opportunity to discuss these matters. Please
contact Leadership Conference Media/Telecommunications Task Force Co-Chairs
Cheryl Leanza, UCC Office of Communication, Inc., at 202-841-6033, or Chris
Calabrese, ACLU, at 202-715-0839, or Corrine Yu, Leadership Conference Managing
Policy Director at 202-466-5670, if you would like to discuss the above issues
or any other issues of importance to The Leadership Conference.

Sincerely,

Wade Henderson
President & CEO

Nancy Zirkin
Executive Vice President

---

^[1] Prometheus Radio Project v. FCC, 373 F.3d 372 (3rd Cir. 2004) (Prometheus
I); Prometheus Radio Project v. FCC, 652 F.3d 431 (3rd Cir. 2011).
(“Prometheus II”).

^[2] Specifically, we oppose relaxation of any media ownership rules, including all
local broadcast ownership rules and the newspaper-broadcast cross ownership,
the radio-television cross ownership rule and the dual network rule.  We also
commend to the Commission’s attention the separate filings of UCC OC Inc. et
al, and the National Hispanic Media Coalition in this docket.

^[3] Promoting Diversification of Ownership, Report and Order and 4th FNPRM, 24 FCC Rcd 5896, 5997 (2009)(“Diversity 4th FNPRM”). 

^[4] S. Derek Turner, Free Press, Out of the Picture 2007: Minority & Female TV
Station Ownership in the United States 12, 14 (2007), http://www.freepress.net/files/otp2007.pdf.

^[5] Id. at 23.

^[6] Id. at 3. 

^[7] S. Derek Turner, Free Press, Off the Dial: Female and Minority Radio Station
Ownership in the United States (2007), http://www.freepress.net/files/off_the_dial.pdf. 

^[8] Id. at 24 (finding white owners average 3.9 stations, male owners
average 4.1 stations, minority owners average 2.6 stations, and female owners
average 2.1 stations).

^[9] Id. at 30.

^[10] Id. at 3.

^[11] Catherine J. K. Sandoval, Minority Commercial Radio Ownership in 2009: FCC
Licensing and Consolidation Policies, Entry Windows, and the Nexus Between
Ownership, Diversity and Service in the Public Interest 4 (2009),
http://www.radiodailynews.com/mmtcreport.pdf.

^[12] Id. at 5.  As of 2009, Sandoval determined that 139 stations were owned
by Hispanic Americans, 129 stations were owned by African Americans,
thirty-four were owned by Asian Americans or Asian/Pacific Islanders, and
fourteen were owned by Native Americans. Id. at 8.

^[13] Id. at 8-9.

^[14] Id. at 4, 13.

^[15] Although this figure is slightly higher than the 3.15 percent found by Turner, both
sets of FCC data are lacking necessary information in key areas.  First,
Turner’s study was based on FCC data from 2007 that did not include any
stations owned by a sole proprietor or partnerships of natural persons. 
Although these categories of owners included in the 2009 data analyzed by the
FCC staff, that data was incomplete for a different reason:  the staff was
unable to determine the race and gender of the owners of 308 (22.1 percent)
stations.

^[16]  Prometheus I, 373 F.3d at 435, n.82 and 421, n.59.

^[17] 2006 Quadrennial Regulatory
Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules
Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, Further
Notice of Proposed Rulemaking, 21 FCC Rcd 8834 (2006).

^[18] 2006 Quadrennial Regulatory Review – Review of the Commission’s Broadcast
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, 2d FNPRM, 22 FCC Rcd 14215, 14216 (2007).

^[19] 2006 Quadrennial Regulatory Review – Review of the Commission’s Broadcast
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, Report and Order, 23 FCC Rcd 2010 (2008) (“2008
Order”); 2006 Quadrennial Regulatory Review – Review of the Commission’s
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of
the Telecommunications Act of 1996, Report and Order and  3rd FNPRM, 23 FCC Rcd 5922 (2008) (“Diversity Order”).

^[20] Prometheus II, 652 F.3d at 471-72. 

^[21] Id. at 472 (emphasis added). 

^[22] The proposed steps are “1) Continue to improve our data collection so that we
and the public may more easily identify the diverse range of broadcast owners,
including women and minorities, in all services we license; 2) Commission
appropriately-tailored research and analysis on diversity of ownership; and 3)
Conduct workshops on the opportunities and challenges facing diverse
populations in broadcast ownership.

^[23] Comments of Office of Communication of United Church of Christ, Inc., et al,, MB
Dkt. No. 06-121, at 39-40 (filed Oct. 23, 2006).

^[24] Comments of Office of Communication of United Church of Christ, Inc., et al, 
MB Dkt. No. 06-121, at 11 (filed Oct. 1, 2007) (discussing Ari Beresteanu &
Paul B. Ellickson, Minority and Female Ownership in Media Enterprises,
at 2 (June 2007) and C. Anthony Bush, Minority and Women Broadcast Ownership
Data, at Study 2, Appendix A, at 18 (July 24, 2007)).

^[25] Comments of National Organization for Women Foundation, et al., MB Dkt. No.
06-121, at 6 (filed Oct. 22, 2007).

^[26] Diversity 4th FNPRM, 24 FCC Rcd at 5903-5910. 

^[27] On reconsideration of May 2009 Order, the Commission exempted “holders of
certain nonattributable interests” from the ownership filing requirement. 
CITE.

^[28] Diversity Order, 23 FCC Rcd at 5942

^[29] The comments suggested additional studies to examine the following questions: 
“(1) has the relaxation of the TV duopoly rules affected the number of
television stations owned by minorities and women? ; (2) has re-implementation
of the failed station solicitation rule increased minority and female
ownership? ; (3) has the relaxation of the radio rules (both generally and by
counting noncommercial stations in the numerical limits) affected the number of
stations owned or controlled by minorities and women? ; (4) has the FCC’s
decision to permit the transfer of grandfathered combinations in violation of
the local ownership limits to certain eligible small businesses resulted in an
increase in the number of broadcast stations owned by women or minorities?” Comments
of UCC OC Inc. et al., MB Dkt. 09-182, at 2 (filed July 7, 2010).

^[30] Prometheus II, 652 F.3d at 471.

^[31] Id.

^[32] Prometheus II, 652 F.3d at 471 n.42 (emphasis added).

^[33] See, e.g., News Release, FCC Launches
Data Innovation Initiative, June 29, 2010.