MMTC Floats TV Ownership Diversity Plan

Borrowing from the energy industry, the Multicultural Media,Telecom and Internet Council proposes that the FCC issue diversity credits to "small disadvantaged businesses" and to station groups that do deals that increase diversity. The credits could be bought and sold. Groups in deals that lessen diversity could buy credits they need to win FCC approval.

 

In an effort to increase diversity in station ownership, the Multicultural Media, Telecom and Internet Council today asked the FCC to conduct a proceeding to explore a marketplace means of doing it  — tradeable diversity credits similar to the carbon emissions credits used in the energy industry.

Here’s how it would work, according to the MMTC:

As the administrator of the program, the FCC would give diversity credits to small disadvantaged businesses (SDBs) and to sellers in deals that result in greater structural diversity.

Buyers in deals that result in less structural diversity would have to pay the FCC for that loss in the form of diversity credits. If they didn’t have enough, they could buy them from other companies or SDBs, which would use the money to fund station acquisitions.

The program would inject greater efficiency into station trading. Today, when large media companies merge, they often have to spin off or swap stations to comply with FCC ownership limits and, in some cases, negotiate additional conditions with the FCC and citizen groups.

On top of that, it can take six months for the FCC to review a deal and make sure that all is in order.

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With the  diversity credit, the merging companies would simply determine how many diversity credits they need and then go out and buy whatever they don’t have.

“The transaction could proceed with much greater speed. While some conditions might still be needed, they would not be as extensive as such conditions sometimes are now.”

Summing up, the MMTC said: “Diversity credits would:

  • Incentivize diversity;
  • Disincentivize consolidation;
  • Place on the beneficiaries of consolidation the responsibility of paying for the remediation of some of consolidation’s ill effects;
  • Serve as a mechanism to provide access to capital to SDBs;
  • Capture the measure of diversity more precisely than an inherently approximate voice test; and
  • Allow for easier administration than a system of voice tests and waivers.”

 

The FCC “voice test” is part of the FCC’s local TV ownership rules. A station group may not own two stations in a market if there are eight or fewer “voices” — that, independently owned TV stations — in the market.

The diversity credit was among five the FCC recommended in its filing.


Comments (15)

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Ellen Samrock says:

June 24, 2016 at 4:28 pm

Just what we need. A call for more nitwit regulation on an industry that is rapidly being decimated by the Feds. Has it ever occurred to the MMTC that there may not be many TV stations left to regulate after the auction? If they’re really itching to regulate something in the dubious name of diversity, why not go after iHeart and Cumulus with their gazillion radio stations?

    Meagan Zickuhr says:

    June 24, 2016 at 6:35 pm

    Agree Roger!

    Keith ONeal says:

    June 24, 2016 at 10:50 pm

    Why bother with Cumulus and iHeart? Both will go bankrupt and out of business soon enough.

    Wagner Pereira says:

    June 25, 2016 at 1:24 am

    Another idiotic post from someone who is clearly clueless about Business, Broadcasting or Bankruptcy Laws.

Veronica Serrano Padilla says:

June 24, 2016 at 4:51 pm

I wonder why they think the FCC would do this? With the spectrum auction and potential loss of minority-owned LPTV TV stations, the FCC has already silently weighed in on what they think of minority ownership.

    Meagan Zickuhr says:

    June 24, 2016 at 6:36 pm

    Very good point Ridgeline!

    Linda Stewart says:

    June 24, 2016 at 10:32 pm

    Ditto.

Meagan Zickuhr says:

June 24, 2016 at 6:39 pm

My $.02 is this….. STOP WITH THE REGULATING! Let businesses decide for themselves and the viewers or listeners they serve dictate what format or programming or genre of content will work! No ratings = No viewership. No viewership = A Change! Why do we need the Govt. (FCC) that far up our ‘business-butts’?! Seriously MMTC.

    Keith ONeal says:

    June 24, 2016 at 10:57 pm

    We don’t need to be like Canada’s CRTC ~ The CTRC tells radio stations what formats to run and TV stations what network to affiliate with. You have to get permission from the CRTC (Canadian Radio & Television Commission [or kommissars]) to change formats or networks. STUPID Rule.

    Ellen Samrock says:

    June 25, 2016 at 11:58 am

    Britain does something similar. They don’t necessarily dictate the format but they want to know what the station’s format is and they have awarded licenses to entities based on the agreement that they will program for under-served communities. They want to make sure that stations in the Outer Hebrides play enough bagpipe music. Never mind that the only people who want to hear it are drunken Scots over a certain age. But the left consistently misses this point: if there is a need, free enterprise will fill it. If there is an under-served community with enough people, broadcasters will program for them because they can make money doing it. But if there are just two families in the entire county of a certain ethnicity it doesn’t make economic sense to do so. The left, however, will insist that a station program for those two families. There is the thinking by people like MMTC that not enough minority groups own broadcast properties. Giving them the chance to do so sounds good on paper but what is the reality. I have to look at what is going on in the LPFM community. A lot of minorities have received permits and have gotten stations licensed. But after a year or two many of them go dark. Obviously, they didn’t have the management skills needed to make their stations financially viable. But to tell the left that and you would be branded a bigot. They’re like children with little understanding with how the real world works.

    Veronica Serrano Padilla says:

    June 25, 2016 at 2:31 pm

    Apparently some on the right couldn’t make their station viable and had to sell out too…

    Ellen Samrock says:

    June 26, 2016 at 4:53 pm

    In general, of course. It can happen to anyone who truly owns a broadcast station. The folly is in trying to politicize what is basically a business issue. There are distressed broadcast properties out there and anyone, including minorities, can make offers and acquire them. They don’t need the help of the MMTC to do this.

Evan Ortynsky says:

June 24, 2016 at 10:01 pm

Just another example of Leftist Redistribution of wealth in the desire for equality! If minorities want to get into the business, they should do it like everyone else. Start at the bottom, do excellent work, move up the chain in a company, and after showing they are responsible capable people, they could be owner or on the board of directors. Before long, they may be able to buy out a part of the company and run it themselves. This crap of trying to lift those that won’t lift themselves by taking from those that work hard to handout to those that do not, is socialism and doesn’t work. Look at Europe, they are bankrupt! At some point there is nobody left to pull the cart with everyone riding on it….

Linda Stewart says:

June 26, 2016 at 10:13 am

As I understand it, this proposal would not involve any redistribution of wealth. Other than the administration, it’s cost free.

    Wagner Pereira says:

    June 28, 2016 at 8:58 pm

    No redistribution? Then what do you call this? “Buyers in deals that result in less structural diversity would have to pay the FCC for that loss in the form of diversity credits. If they didn’t have enough, they could buy them from other companies or SDBs, which would use the money to fund station acquisitions.”


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