FCC Should Take Up 3rd Circuit Directive in 2018 QR, Starks Tells NABOB
The FCC should take up the 3rd U.S. Circuit Court of Appeals' directive to gather evidence on how broadcast ownership rules affect diversity as part of the agency's pending 2018 quadrennial review order (see 1909250064), said Commissioner Geoffrey Starks Thursday at the National Association of Black Owned Broadcasters Fall Broadcast Management Conference. The ruling was the dominant regulatory topic, along with the QR and the state of the radio industry.
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The FCC should “do what the court asked us to do,” said Starks, and make use of as-yet-unreleased diversity data collected through form 323 ownership reports. “To have a court tell you four times -- four times! -- that you have fallen short is shocking,” Starks said.
The Democrat said the agency should complete its rulemaking on equal employment opportunity rules. Starks previously updating EEO rules in its proceeding on EEO enforcement, and helped engineer the compromise that led to an NPRM (see 1906240028). “We have fallen down on our duties,” Starks said now. Collecting EEO data could help the FCC get a better sense of diversity in broadcasting, he said: “We should make sure broadcasting reflects America.”
The chairman's office is deciding how it will go about appealing the 3rd Circuit's decision, said Chairman Ajit Pai media aide Alex S anjenis. Broadcast ownership rules “shouldn't be a partisan issue,” he said. The FCC's stance “should reflect the state of the industry.”
Kate Black, aide to Commissioner Jessica Rosenworcel, said the most recent diversity data on the FCC website is from 2015. The agency “needs to take a fresh look at the numbers,” she said. It's not clear the agency can come up with diversity data that could satisfy the court's requirements, said Commissioner Mike O'Rielly's aide Joel Miller. The 3rd Circuit provided the FCC “with a clear road map,” said David Honig, Multicultural Media, Telecom and Internet Council senior adviser.
The court decision's “a disaster no matter where you stand,” said NAB General Counsel Rick Kaplan. The repeated cycle of the FCC creating ownership rules and having them knocked down by the 3rd Circuit hasn't led to increased diversity, Kaplan said. Connoisseur Media CEO Jeff Warshaw condemned the ruling. It “was not a good thing for the [radio] industry,” because it likely delayed and possibly scuttled local ownership cap deregulation. “Without deregulation the business will shrink and shrink,” Warshaw said. “We're very much hamstrung.” Ownership rules haven't worked, and groups like NABOB should work with industry to come up with diversity solutions that don't require rules, Kaplan said.
The judicial remand could have a silver lining for minority broadcasters, said Chesley Maddox-Dorsey, CEO of American Urban Radio Networks. “As African Americans, we need more protection,” she said, saying the court decision could lead to a wider buy-in for restoring the minority tax certificate. The certificate “could be a bipartisan story,” said NABOB President Jim Winston. It came up Wednesday at NABOB, too (see 1910020057).
The ruling isn't likely to have much effect on current radio dealmaking because “there's no money to do deals anyway,” Warshaw said. The deal flow is “the lowest it's ever been,” said Maddox-Dorsey. Radio groups can do transactions that don't put them in conflict with the subcaps, Warshaw said.
Delaying deregulation isn't necessarily a problem for radio, said Steve Roberts, CEO of Roberts Radio Broadcasting. Part of the industry's decline has been caused by companies growing too fast, he said. Warshaw repeatedly characterized radio as in trouble, facing revenue and audience declines. “There are certain things we can't outrun,” he said.