Minority Media Ownership - July 19, 2005

Good morning. It is my true pleasure to be part of the Minority Media and Telecommunications Council’s annual legislative conference today. I want to thank David Honig for inviting me to be here, and I am delighted to once again join my good friends, former Commissioner Gloria Tristani and current Commissioner Jonathan Adelstein, at today’s panel.

As most of you know, I have been engaged in the debate about the future of American media for quite a few years now. When the Federal Communications Commission, under the direction of then Chairman Michael Powell, voted to relax media cross-ownership limits on June 2nd, 2003, I marched with Reverend Jesse Jackson in front of the FCC to protest the vote. It was clear to many of us back then that the rules were relaxed through an undemocratic process contrary to the public interest. At the time, I organized the Congressional Black Caucus in opposing any FCC effort to relax media ownership safeguards by sending a letter outlining our objections based on their disastrous effect on diversity, especially minority ownership and content, in the media. There was no doubt in my mind, or the minds of the twenty-eight other Black Caucus members who signed the letter, that the media landscape was already under-regulated and highly concentrated. We all saw the effects of the 1996 Telecommunications Act on the radio industry, when the number of radio station owners decreased by at least 30 percent. By 2000, only 175 minority broadcasters owned 426 stations, about 4.0 percent of the Nation's 10,577 commercial AM and FM radio stations. Minority owners' share of the commercial television market is even more miniscule. In 2000, only 23 full power commercial television stations were owned by minorities, representing only 1.9 percent of the country's 1,288 licensed stations. This was the lowest level since the tracking of such data began in 1990. My fear is that further relaxation of media ownership rules could dramatically change the structure of the entire media marketplace, with long-term and irreparable consequences for First Amendment rights and diversity of voices.

The Republican-controlled House refused to block the June 2003 media ownership rules. Fortunately, the 3rd Circuit Court of Appeals, with the approval of the Supreme Court, struck down the rules and remanded them back to the FCC for further consideration. The FCC is scheduled to take up this issue again under the direction of its new Chairman, Kevin Martin. I believe any renewed efforts to further deregulate the media will be proceeding in a drastically different and perhaps positively charged environment in which politicians, watchdog groups, and the public in general will vigilantly watch the FCC’s every move.

However, I think the biggest battles on the issue of minority media access and distribution will be fought in Congress over the next two years. As you are aware, Congress is poised to consider some of the most important telecommunications legislation in a decade. This month, we are expecting to consider legislation that would set a deadline for transition from analog to digital television. This fall, we are planning to re-write the 1996 Telecommunications Act to take into consideration the evolving technology of Voice over Internet Protocol, or VOIP. Both of these changes will have dramatic repercussions for the future of “localism, competition, and diversity” in our nation’s media, with disproportional effects on racial and ethnic minorities. New technology in general, such as the transition to digital television, can open the door to a richer, broader and more inclusive variety of telecommunications services accessible to all Americans.

Today millions of Americans are enjoying the promise of new telecommunications technology by taking advantage of community resources and information, as well as expanding their opportunities for employment, education and entrepreneurship. Unfortunately, current high-speed, at-home access to these types of services has been largely unavailable to a significant number of Americans, and minorities in particular. We must seize the opportunity presented by upcoming telecommunication legislation to ensure greater equality that closes the digital divide for minority owners and consumers.

First, any discussion of legislation setting a deadline for digital television transition must be accompanied by a government compensation program that would help alleviate the financial burden for digital transition. As the legislation proposed by the Republican majority on Energy and Commerce Committee stands now, when the DTV transition is complete, all households that rely exclusive on over-the-air broadcasts will see their television screens go dark. These twenty-million households will then have two choices: to purchase an expensive set-top box so that they can continue to watch the television programming that they used to receive for free, or not to watch television at all. What is especially alarming is that, according to a February 2005 GAO report, 48% of these over-the-air-only households have incomes under $30,000, which disproportionably include minority and rural households. If we do not compensate consumers for the required set-top boxes, millions of consumer television screens will go dark, placing a tremendous economic burden on African-American, Hispanics, and less affluent rural families.

Second, it is important for us to remember the stark reality of the digital divide: today, about half of households with incomes above $75,000 have high-speed internet, or broadband, while less than half of families earning under $30,000 have any internet access, even dial-up access. Those without internet access are more likely to belong to a racial or ethnic minority group. Without access to broadband, these Americans are further disadvantaged in areas critical to the creation of a level-playing field, such as access to education, healthcare, employment, financial services, community resources, and especially democratic governance. To bridge this divide, I want to highlight the tremendous potential of community internet – which has been called a “silver bullet for poverty.” This affordable, universal broadband access networks provided by local governments, schools, public/private partnerships, non-profits or community groups via new wireless and wired technologies could greatly bridge the current “digital divide” among the rich and poor. For example, in my district, Culver City has been experimenting with community wireless for some time now. In the middle of town, within a one mile radius, there is a wireless “hot spot” in which any individual can receive free, wireless, high-speed internet access.

While it is a very small step in providing affordable internet access for all, I believe the federal government can play a greater role in advancing the availability of such use. To say the very least, Congress should not pass laws to stifle such innovation and competition. Indeed, one way of making community internet or municipal broadband more available is by setting aside spectrum for community internet networks. More spectrum will become available after broadcasters return it in exchange for digital channels. Congress should take a hard look at the issue of community wireless during the spectrum auction. Community Internet networks have the potential to deliver universal broadband at lower costs to our constituents. A set-aside of spectrum for unlicensed uses, such as these, will help make community Internet more viable and help close the digital divide.

Finally, I want to return to the issue of minority media ownership. While we need to turn back the tide of media consolidation, we cannot lose sight of the fact that minority businesses who want to compete in the field of telecommunication services face tremendous barriers to entry. We must look at ways to enhance the ability of small market players and new entrants to compete against the dominant players in the spectrum auction. I have already cited to you the grim statistics on minority media ownership, and experts find little reason to believe change will occur without some measure of government intervention. The cost of this imbalance is evident in constant misrepresentations of people of color in our various media.

In the past, I have strongly supported legislation that would reinstate the minority tax-certificate and distress sale programs, which are responsible for 50% of current minority media ownership. But I believe we can, and must, do more. While the auction of reclaimed spectrum presents another important opportunity for minority and other small businesses, this opportunity will only be realized if important safeguards are established. These safeguards should ensure that spectrum is set aside for bidding by small players and new entrants - specifically minorities and women - and provide support for a “Telecom Development Fund” which would provide necessary access to capital to allow minorities and women to make use of the set-aside spectrum.

As the deadline for considering the digital television legislation quickly approaches, all of us here today must work hard to seize this tremendous opportunity to advance minority ownership and participation in the telecommunications arena. In the next several weeks I am going to circulate a sign-on letter on behalf of the Congressional Black Caucus that would lay out the basic principles of federal compensation program and digital set-aside, and I encourage all of you to join me in this effort. Thank you again for having me here today.